Which of your workers are eligible for overtime pay? Which are independent contractors versus employees? It soon won’t be good enough to guess … get ready to document and show proof.
The U.S. Department of Labor issued a proposal last month that would require employers to prepare detailed records on every worker’s status under the Fair Labor Standards Act (FLSA). Then—as with I-9 forms—you’d have to keep that information on file and be prepared to show it to the DOL upon request.
The new requirements—which wouldn't be binding for at least a year—are tucked into the department’s Spring 2010 Regulatory Analysis, a document that deals mostly with occupational safety and health issues in the wake of the Upper Big Branch Mine explosion in April.
But when the requirements see the light of day, they could cause a massive paperwork headache—and an outpouring of employer outrage.
Already, the U.S. Chamber of Commerce has blasted the proposals as micromanagement, and employment law blogger Lisa Guerin says they represent “a broad paradigm shift” that will redefine how the DOL handles enforcement of the FLSA.
To help you avoid potential penalties and lawsuits, Business Management Daily has compiled an easy-to-read guide for employee classification: Exempt or Nonexempt? How to Make the Call and Avoid FLSA Overtime Lawsuits. Get your copy here...Every employer with exempt employees
If the new requirements are approved, every employer with exempt employees would have to:
- Perform a classification analysis explaining why each employee is exempt from the FLSA
- Provide a copy of the analysis to each employee
- Retain the analysis and provide it to DOL Wage and Hour Division inspectors if they request it.
In addition, employers would have to provide every worker with “basic information about their employment, including how their pay is calculated.”
Those requirements would effectively add another layer of recordkeeping for every employee in the U.S.
The DOL plans to issue a formal Notice of Proposed Rulemaking in coming weeks. A public comment period of several months usually follows the formal notice, after which the rules may be amended or enacted. The process typically takes a year or more.Misclassification crackdown to continue
The new requirements come on the heels of renewed DOL efforts to crack down on misclassification of employees as independent contractors.
The DOL’s Spring 2010 Regulatory Analysis vows to continue that enforcement effort.
Exempt or Nonexempt? provides targeted answers to your most vexing classification questions. Inside you'll find:
Get your copy today!
- Classification Guidelines: Conducting a salary-basis test vs. a duties tests
- 10 Common Employer Mistakes ... and how to avoid them!
- 6 Compliance Tips for accurate classification
- Frequently Asked Questions
- PLUS a self-audit to conduct on your own organization!