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Selecting a lending partner

National Mortgage Professional
Jul 05, 2005

To pay or not to pay overtimeJulie Scheurerovertime pay, The Fair Labor Standards Act, the Society for Human Resource Management Are you unsure if everyone who is entitled to overtime at your company is receiving it? Join the crowd. Look up "confusing" in the dictionary and you're likely to see "The Fair Labor Standards Act," which is supposed to explain who is eligible for overtime pay. Instead, its vague, outdated rules have left employers to fend for themselves. And they aren't doing very well. Since 1997, the number of FLSA class-action lawsuits has increased 229 percent, according to the Society for Human Resource Management. That's why the Department of Labor has revised the rules for the first time since the Ford administration. Will the revisions end the confusion? That's up for debate. The bad news is the new regulations may cost your company more money. Employees making less than $23,600 a year will now be guaranteed overtime, regardless of their job duties. The good news is that you will now be able to deny overtime to most employees making more than $100,000 annually. But what about those making between $23,600 and $100,000 a year? It depends on their job duties. If they are blue-collar workers or first responders, such as firefighters, police officers and emergency medical technicians, the new regulations require you to pay them overtime. Overtime can be denied to executive, administrative, professional, computer or outside sales employees. The difficult part is determining who falls into those categories. The revisions are supposed to clarify which duties employees must perform in order to be exempted from overtime. The major changes include: *No more short and long tests to assess employees' duties. Those tests have now been condensed, so there is just one set of criteria for each job classification. *Employees no longer have to spend a certain percentage of time on exempted duties to be denied overtime. *Employees can only be considered executive if they are authorized to hire, fire or recommend such changes in employment status. (And no, Jill's off-handed comment that Jim should be fired because he's a pig doesn't make her exempt from overtime. The recommendation should carry some influence.) *Learned professionals must now perform work that is "predominantly intellectual in character," and "requiring the consistent exercise of discretion and judgment." Confused? Well, the regulations won't give you much help understanding the phrase "intellectual in character." However, "exercise of discretion and judgment," a confusing requirement also used in the test for administrative employees, has finally been clarified. In general, someone exercises discretion and judgment if they can compare and decide between possible courses of action without a supervisor's immediate approval. To avoid hefty fines and possible lawsuits, you may want to spend this summer figuring out who should be getting overtime in accordance with the new rules. So much for working on your tan! But you don't have to do it alone. The Society for Human Resource Management recommends that companies, especially those without a human resources manager, outsource this task. When it comes to navigating the choppy waters of government regulations, you need all the help you can get! Julie Scheurer is a human resources communications specialist for Patriot HR Inc., a human resources outsourcing firm in Canton, Ohio. She can be reached at (877) 968-7147, ext. 159 or e-mail [email protected].
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