The Department of Labor is increasing its audit to ensure employers are not misclassifying employees exempt. In addition, they are changing the rules to make more positions classified as non-exempt.
Employers should audit their employee classifications to ensure they do not have misclassified employees. Conducting job analysis on for all positions is the best way to ensure positions meet both the duties and the salary test.
Being paid on a “salary basis” means an employee regularly receives a predetermined amount of compensation each week. The predetermined amount cannot be reduced because of variations in the quality or quantity of the employee’s work.
The New rule increases the minimum weekly salary to $970 a week.
1. Employers should evaluate the weekly salaries of exempt employees. An employee earning less than $970.
An employee earning less than $970 should be reclassified Non-Exempt and paid overtime.
If an employee meets the duties test increase their pay to $970 or more and continue to pay a weekly salary.
2. The 2-second test is the duties test, employees are exempt based on their job duties meeting one of the four exemptions. The duties must be performed 51% of their job.
Evaluate their job duties and hours to determine the classification of their position.
Develop job descriptions and have employees sign and date the job descriptions.
Employers should expect classification audits in 2016 and beyond!