Overtime mistakes your managers must avoid
Starting Dec. 1, new DOL rules take effect that nearly double the salary threshold at which most salaried workers become exempt from having to be paid overtime.
The overtime ceiling will rise from $23,660 per year to $47,476. That means more than 4 million additional white-collar workers will qualify for overtime pay for the first time.
If you’re serious about managing those new, higher payroll costs, you’re going to require supervisors to keep careful tabs on hours worked — and all the documentation that backs it up.
Now is the time to train bosses on their responsibilities for complying with your overtime policies. Warn them against making these mistakes:
Allowing casual overtime. Now more than ever, it’s critical to require employees to get advance approval to work overtime. Supervisors are your gatekeepers here. They can OK overtime hours; they can refuse to authorize OT. They are responsible for initiating discipline against employees who work unauthorized overtime.
Critically, they must never allow off-the-clock work.
Note: You must still pay full overtime wages to employees who work unauthorized OT.
Miscalculating overtime pay. Train managers to check the math on time sheets, if you use them. Employees earn overtime at one-and-a-half times their regular rates of pay. As a general rule, any payment that’s measured by or based on employees’ hours worked, production or efficiency must be included in wages for purposes of determining the regular rate of pay.
Not paying telecommuters properly. Out of sight cannot mean out of mind. Employees who work from home must be paid for every hour worked.
Problem: Getting them to keep track of their hours. Have bosses and telecommuters come to a reasonable agreement regarding work hours. Have both parties sign a copy, which should be placed in the employee’s file.
Watch out: Train managers to periodically gauge telecommuters’ output. Does it appear that they may be working more than 40 hours per week? If so, that calls for an amicable conversation about agreed-upon hours and the consequences of working unauthorized overtime.