If the DOL’s new overtime regs go through as written — and there’s every indication to believe they will — employers of all stripes will have much more than just classification issues to contend with.
The passage of the regs will add to a perfect storm of events that has made employers everywhere prime targets for pay lawsuits and government fines.
HR Morning recently attended the SHRM Conference & Exposition in Las Vegas, and sat in on attorney Christine D. Hanley’s sobering presentation, “Working Remotely, Connectivity and the FLSA: The New Bermuda Triangle.”
A dangerous ‘triangle’
Hanley described the “triangle” formed by remote work, 24/7 online connectivity and the FLSA — and how that triangle is forcing employers into “uncharted territory” that can easily lead to DOL scrutiny and pay lawsuits exacerbated by overzealous attorneys.
Because of tech advancements, hourly, non-exempt employees are now working in positions where tasks can be performed remotely. This makes tracking workers’ time a daunting challenge for employers.
Hanley’s presentation came just one day before the DOL released its proposed changes to the FLSA’s overtime regs. But rather than diminishing what was covered in her presentation, the DOL’s move has made Hanley’s warning even more urgent.
Reason: With the DOL’s salary threshold for exempt status jumping to $50,440, some five million additional workers are expected to move into the non-exempt classification category that Hanley sees causing so many problems.
Laptops, smartphones and tablets
Connecting to the workplace online has become so simple that many increasingly do so with their laptops, smartphones and tablets. This can create costly liability when it begins to involve hourly, non-exempt employees.
One position Hanley spoke about was that of an office assistant. While that position previously consisted solely of filing hard-copy materials in filing cabinets right in the office, that job has changed drastically.
With more companies relying on online file storage, these tasks can generally be complete whenever and wherever a staffer pleases. And if employers don’t have a system in place to either prevent someone from putting in overtime hours or accurately track those hours, they’re inviting problems.
As HR pros are well aware, FLSA lawsuits have been skyrocketing in recent years. For attorneys, pay lawsuits are a very lucrative proposition. Hanley reminded employers that the FLSA lawsuit trend is at least in part due to “the prevailing plaintiff fee scheme,” where guilty companies must pay the winning employee/employees’ improperly denied OT as well as reasonable attorney fees and costs.
5 key questions
So what should you do to safeguard your firm from problems?
For starters, a lot is riding on your managers. Employers need to be able to rely on managers and supervisors to control their staff and make sure non-exempt employees are clear about when they’re expected to work and when they must stop.
Hanley offered a few key questions designed to determine if employers are unwittingly leaving themselves open to OT issues, as well as help employers put controls in place to ensure staffers are only working when they’re supposed to. These include:
- Who’s doing what for whom (exempt or non-exempt staffers)?
- What are they doing (the business purpose of the tasks)?
- How are they doing it (connectivity)?
- Where are they doing it (remote working)?
- When are they doing it (FLSA and overtime)?
In addition to answering these questions, Hanley also urged firms to “know when employees are working, and control their worktime.” To do this, managers and supervisors may have to regularly remind non-exempt employees not to check work-related email outside of their shifts and to limit their access to connectivity tools that offer access to the workplace after hours.
Then, there’s the documenting. Documentation is paramount to preventing FLSA issues. Employers must be meticulous when it comes to tracking and recording workers’ time. As Hanley pointed out, workers know how many hours they’re putting in and the “… the DOL has an online app that employees can use to track their own time.”
Finally, Hanley said the following two documents are critical for employers that rely on remote work:
1. A Statement of Understanding. This documents spells out exactly where, when, why and how remote work is to be completed, and employees sign off on their understanding of and agreement with the document.
2. A safe harbor policy. This says that if the company inadvertently fails to pay a non-exempt employee correctly, that worker must let the employer know about the oversight.