Exempt/Non-Exempt...What's the Big Deal?

Consider these staggering statistics:

·        In fiscal 2011, the Labor Department recovered $225 million in back wages for employees, up 28% from fiscal 2010.

·        One in three companies has been hit with a wage-and-hour claim in the past year. 

·        Wage and hour class action lawsuits now outnumber all other discrimination suits combined.

·        The Department Of Labor estimates that more than 80% of companies are out of compliance with federal and state wage and hour laws.

·        President Obama has increased the Department of Labor’s enforcement budget.

So, the Big Deal is that the workplace environment is right for your business to get sued.  Seems like this is a good time to make sure your exempt/non-exempt employee classifications are airtight.

Under the FLSA, employees are entitled to overtime unless they're executives who:

·        manage and hire and fire employees;

·       make key decisions;

·        are considered professionals — such as lawyers and engineers — with advanced degrees, among other criteria.

Also exempt are certain information technology workers and sales representatives whose hours can't easily be tracked.

And if you use independent contractors, better review their contracts to ensure the feds won’t claim they should be classified as employees.

Exempt/Non-Exempt is a very big deal.  Take the time now to make sure your employment contracts, procedures and handbooks are an asset to you should you need them.

Protecting your business is kind of a big deal.

Working Off the Clock?

A recent article in USA Today states:  "More American Workers Sue Employers For Overtime Pay".  Not surprising.  We all have friends that carry employer-provided mobile devices.  When they are interrupted with text messages or emails on the weekend, are they being compensated?

We've all heard stories of businesses laying off workers in an attempt to save money and then expecting the remaining employees to pick up the slack.  Are they being paid the overtime that they are entitled to?

Unfortunately, these are sources of today's new Employment Practices claims that focus on Wage and Labor issues.  Last year alone 7,006 Wage-And-Hour Suits were filed against employers.  As an employer, you may consider these suits frivolous, but you will still have to defend.  The average cost to defend yourself in one of these allegations is well over $40,000.

Does your insurance program protect you in an event like this?  Unless you have an Employment Practices Liability policy (EPL), with the specific additional coverage for Wage and Labor issues, the answer is highly unlikely.

The good news is that many insurance companies offer EPL coverage for premiums as low as $500 a year.  In conjunction with many of these policies, you may have access to a toll-free hot line to put you in contact with a nationally recognized law firm with immediate answers to most EPL questions.

Don't wait until you are served with legal papers, contact your Trusted Advisor today.