XpertHR Reports on Avoiding the Most Costly Wage and Hour Mistakes
(3 months ago)
NEW PROVIDENCE, N.J., Feb. 14: Wage and hour requirements are some of the most familiar employment laws known to employers, but that doesn't mean compliance is easy.
Employers can open themselves up to an investigation by the US Department of Labor if they pay less than the applicable state minimum wage, misclassify their employees, or discriminate on wages, says a new XpertHR report on avoiding costly wage and hour mistakes.
The federal government's minimum wage rate is currently $7.25 an hour. However, hourly workers could be paid as much as $15.45 in Seattle, $15 in Mountain View, California or $14 an hour in San Francisco. An employer's failure to pay the required minimum rate can result in costly fines.
Other missteps employers may make include incorrectly misclassifying workers as exempt from minimum wage and overtime laws or as independent contractors rather than as employees. This leaves companies vulnerable to lawsuits and fines.
Generally, exempt employees are key personnel who possess management and decision-making responsibilities and are performing these tasks more than half of the workday. In most cases, employees are considered nonexempt unless they clearly meet the job duties and requirements of an exempt position.
"The single most important rule to remember when classifying an employee is that it is an employee's job duties, not job title, that matter," says Robert Teachout, Legal Editor, XpertHR.
Another violation is paying employees less because of their gender. The Equal Pay Act requires equal pay for equal work, regardless of gender. An employee who is paid less than other employees because of his or her gender can file a claim against the employer for damages. The term "pay" refers not just to salary but also to overtime, bonuses, vacation and holiday pay, stock options, life insurance and all other benefits and compensation.
In addition to potential legal claims, disparities in pay for the same or equivalent jobs can also lead to employee morale issues, affecting a department's productivity and a supervisor's ability to retain employees.
"There are a plethora of ever-changing wage and hour requirements, which may different from state to state and city to city," says Teachout. "Employers need to be aware of the rules and regulations or they can easily make mistakes, and these errors can be costly," says Teachout.