Controversy, Compliance and Changes in Fair Labors Standard Act (FLSA)Rajesh Unadkat
On May 18th, an update to the Fair Labors Standard Act (FLSA) was published, where any employee making less than $47,476 will now be classified as non-exempt. Employers have until Dec 1st, 2016 to comply. Obviously this new ruling will undoubtedly cause headaches for your compliance and audit professionals. ‘Covered employers’ who violate this law can be subject to heavy fines, litigation, and/or audits. Here are ways to mitigate your organization’s risks from the new FLSA:
- Audit employees salary and duties performed using FLSA basic requirements for exemption tests
- Determine if salary increases are warranted for those who normally work over 40 hours per week
- Reclassify appropriate employees from exempt to non-exempt and vice versa
- Establish policies that educate BOTH non-exempt employees and their manager on proper protocols
- Keep good coverage records on managers who administer these policies
As the saying goes, ‘the best defense is a good offense.’ As an organization, how are you prepared to handle the onslaught of requirements and paperwork? Do you have systems in place that will automate policies and SOPs with changes to the new FLSA law that will help you stand up to audits and/or mitigate risk? Dec 1st will be here soon enough.