Are your employees classified correctly according to the Fair Labor Standards Act (FLSA)? What kind of impact can it have on your organization if they aren’t?
To meet an exempt classification, a job must pass a “test” consisting of three prongs outlined in the FLSA regulations – salary level, salary basis, and duties. Although these rules are clear, the difference between exempt and non-exempt positions can be confusing, and misclassification can pose liability to your organization in many forms such as back pay, reclassification and market-competitive compensation adjustments, morale issues and even legal defense fees if suits are filed by employees. The longer you wait to reclassify your employees the more expensive it may be. And because job duties change over time, what was once an appropriate classification maybe a year or two ago can now be a misclassification.
HRC helps our clients meet the requirements of the FLSA, by reviewing positions’ exempt/non-exempt status, as well as overtime policies and procedures. HRC utilizes the most current regulations, as well as Department of Labor information to provide best practice recommendations for position classifications. Our team is experienced in applying employment laws and has strategic partnerships with employment law attorneys to validate classifications if needed.