We asked 376 HR managers how well they thought they understood the Fair Labor Standards Act. Here’s what they said. The question we posed in a survey of 376 HR managers: “How would you rate your understanding of the Fair Labor Standards Act’s rules on overtime?” They responded —
“Very knowledgeable”: 25%
“Somewhat knowledgeable”: 37%
“Have a basic understanding”: 25%
“Not sure”: 13%
The latest version of the FLSA has been in force for almost four years now, and still there’s some confusion about the regs.
A couple of the biggest trouble spots:
— Deciding which IT workers get overtime pay and which don’t. In general, higher level IT people are “exempt” and aren’t paid OT, while lower level workers, such as help-desk staff, are “nonexempt” and eligible for OT.
— Classifying contract workers: The general rule here is that there is no special rule for contract workers. They’re classified the same as they would be if they were regular, full-time staff.
The contract-worker question tripped up retail giant Target a few years ago when an audit by U.S. Labor Department auditors showed the company had placed contract maintenance workers in a special category and didn’t pay them overtime. Cost to Target in back pay and penalties: $1.9 million.
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