This is part 2 of a 3 part series on the sweeping FLSA Overtime Changes planned to be announced this year. This article highlights some specific company policies you should consider updating in order to comply with any new overtime rules. Part 1 focuses on what employers can do to prepare for the changes. In Part 3, we examine the actual rule changes announced and what you should do to implement them effectively.
This month, more than 5 million U.S. workers may be affected by significant changes to overtime rules and which employees qualify for exempt status. Chances are, some of those employees may work at your company. In order to prepare, now’s the time to review a number of your policies and procedures that apply to non-exempt employees, and whether they should be updated or added to your employee handbook.
Here are 5 key policies you should review now so you’ll be ready when the FLSA overtime rules are announced.
If you don’t have some kind of timekeeping policy in writing, now is definitely the time to create one.
Changing the habits of your formerly exempt employees with regards to timekeeping is critical to prevent a wage and hour violation.
These employees are likely used to working after hours – responding to work email, finishing up projects, or engaging in other work tasks.
While intentionally working off-the-clock may not be your employee’s goal, you want to be sure that your policies are clear around off-the-clock work and the company’s commitment to recording all time worked by non-exempt employees.
Be sure to train your previously exempt employees who may not be familiar with your timekeeping procedures, e.g., how to track time worked, limits on clocking in before their scheduled start time, how to properly track evening work to check emails, how and when to turn in their time for each pay period, etc.
The Golden Rule of wage and hour: non-exempt employees must be paid for all time they are “suffered or permitted” to work. This doesn’t just mean time in the office, but all time, whether approved by the employer or not.
Communicate to your non-exempt employees they they must accurately record all time worked, regardless of when and where the work is performed. It should be made clear that off-the-clock work (engaging in work assignments or duties that are not reported as time worked) is prohibited. Also convey to your managers that shouldn’t request, require, or authorize non-exempt employees to perform work without compensation. That includes checking email on personal devices after work hours.
If non-exempt employees feel they must work off-the-clock, let them know that they should receive permission first.
Bring Your Own Device (Use of Personal Devices)
“Non-exempt employees are not authorized to use their personal devices for work purposes unless they receive authorization in advance from management. This includes but is not limited to reading, sending, or responding to work related e-mails, sending text messages, and answering or initiating phone calls.”
If a non-exempt employee checks their work email on their personal device (e.g. smart phone, tablet, or home computer), time spent working on this device is considered time worked, and should be tracked and paid accordingly. So it’s a good idea to have a policy in place for non-exempt employees that specifically addresses this.
In many cases, employers won’t allow a non-exempt employee to use their personal devices for work purposes, or will only limited, authorized use.
Meal Periods and Break Periods
Many states requires meal and/or break periods for non-exempt employees. It’s important to inform employees of these breaks and your clock in/out procedures, and to notify them that no work should be performed during such breaks. Sometimes these breaks can be waived by the employee if they choose to do so and if they sign a written waiver, but check your state laws before offering this option, as it may not be allowed.
State and Local Overtime Laws
Now’s the time to familiarize yourself with your state and local overtime laws. Although most employers will only be subject to the federal requirement to pay time and a half for hours worked over 40 in a week, Alaska, California, Colorado, Florida, and Nevada all have daily overtime, and Massachusetts and Rhode Island require some employers to pay a premium for work on Sundays. Whatever your state requires, make sure your managers are aware of the rules and that you’re prepared to comply.
There may be other policies specific to your business or industry that require attention in light of the upcoming changes. Once you have all of these policies in place, be sure to enforce them fairly and consistently among your workforce, even if that means stopping a formerly exempt employee from doing things they want to do that are also useful to you, like checking and responding to their work email over the weekend. This may present challenges for both employees and employers at first, but having clear policies in place can help make the transition a much smoother process.
For more detailed information on calculating hourly wages and best practices on how to approach reclassifying exempt employees to non-exempt, download our free FLSA Overtime Changes Planning Guide.