SHRM encourages lawmakers to update FLSA to meet changing needs

The Society for Human Resource Management (SHRM) recently came before the U.S. House Subcommittee on Workforce Protections with an urgent message: Update the 73-year-old Fair Labor Standards Act (FLSA) to satisfy the demands of today’s workplaces.

According to Nobumichi Hara, an HR executive and SHRM member who testified at the Congressional hearing, “The FLSA reflects the realities of the industrial workplace in the 1930s and not the workplace of the 21st century.”

As senior vice president of human capital for Goodwill of Central Arizona in Phoenix, Hara drew on his own experience to illustrate some of the FLSA limitations he’s encountered with Goodwill employees. Specifically, he expressed concern that the FLSA doesn’t permit employers to provide flexible workplace benefits, such as flextime, telecommuting and compressed workweeks, to millions of nonexempt (or hourly) workers.

In his closing remarks, Hara shared the sentiment of many who testified – that reform of the FLSA would encourage employers to better meet the needs of their employees.

SHRM encourages lawmakers to update FLSA to meet changing needs

Can salaried employees receive overtime pay?

Towering billboards and catchy advertisements shout the message: “Unpaid overtime hours? Wronged by your employer? You may be entitled to money!”

Class action lawyers are enjoying a brisk business targeting employees who believe they haven’t received their entitled overtime pay – and helping them recover these “lost” wages in court. With the Department of Labor (DOL) estimating that a staggering 70 percent of employers aren’t in compliance with the Fair Labor Standards Act (FLSA) in some manner, now is the time to review one of the biggest areas of vulnerability for employers: misclassifying employees as exempt vs. non-exempt.

The DOL states that:

The FLSA, which prescribes standards for the basic minimum wage and overtime pay, affects most private and public employment. It requires employers to pay covered employees who are not otherwise exempt at least the federal minimum wage and overtime pay of one-and-one-half-times the regular rate of pay.

Determining those employees “who are not otherwise exempt” is the tricky part, however. Problems may arise if it appears you’re avoiding paying an employee overtime pay by misclassifying the non-exempt employee as an exempt employee. In some cases, salaried employees are entitled to overtime pay; the distinction is whether the employee is “exempt” according to FLSA requirements. While most exempt employees must receive a salary, salaried workers aren’t necessarily exempt from being paid overtime for working more than 40 hours in a week.

Generally speaking, employees who work in an executive, administrative or professional capacity - as well as certain employees in computer-related positions and outside salespeople -are exempt. To qualify for an exemption, these employees must meet certain tests regarding their job duties and be paid a salary of at least $455 per week. Job titles do not determine exempt status. Rather, an exemption applies when an employee’s specific job duties and salary meet all the DOL regulations.

Check out the ComplyRight Now E-Guide, Determining Exempt vs. Non-Exempt Employees, for help figuring out whether an employee is exempt or non-exempt – and to steer clear of FLSA-related employee lawsuits.

Can salaried employees receive overtime pay?