Minimum wage and overtime
While the heat Obama-era overtime rules has cooled since the Trump administration came into power. However, employers still have to remain vigilant. Three common areas employers keep an eye on include regular rate calculations, misclassifications and commissions, said Moore.
Regarding rate calculations, unless salaries employers are owed 1.5 times their regular rate of pay for all time worked in excess of 40 hours, she said. This includes all remuneration for employment except certain payments excluded by the FLSA, including PTO, vacation pay, sick pay, gifts etc. That means, she noted, overtime rates must include commissions, salary, piece rate, nondiscretionary bonuses and incentives.
And the classification of employees is also paramount. Just paying a salary doesn’t mean a worker is exempt from overtime. “Exempt” means not subject to certain FLSA requirements, she said.
And misclassifications can come at a cost. For an example, a former employee was paid a $60,000 salary, worked 50 hours per week for one year and paid biweekly.
In that scenario, there was $22,500 of unpaid OT. For a class of 100, that means $2,250,000 without any penalties, interest or attorney fees, she said.
Employers should audit exemptions and to follow up with payroll to ensure they are performing regular rate calculations properly, and including all wage types.