Florham Park counsel Bill Horwitz was quoted in a SHRM article titled, “Overtime Rule Changes May Reveal Misclassified Employees.” The December 1 rule raises the threshold for exempt employees from $23,660 to $47,476. Those earning less than the threshold must be paid time-and-a-half for any time worked beyond 40 hours in a work week.
Bill noted that there are two main reasons why previously properly classified employees may now be misclassified.
- The job duties that employees actually perform and the amount of time spent on them often change as the needs of the business change.
- The legal requirements for exemptions change.
Bill also stated that employers should ideally conduct regular audits to ensure employees are properly classified and that an audit of FLSA exemption classifications should include: a review of job descriptions, a review of policy and procedure manuals that describe the work, interviews of employees and their supervisors and observations of employees performing their work.
Bill also highlighted being aware of differences in state laws: "If employees with the same job title work at different locations, the employer should not limit the audit to the employees in one location."