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2016 Overtime Compliance Rules: Fee Basis & Classifying Workers

Overtime Compliance Rules

‘Fee Basis’

Administrative, professional and computer employees may be paid on a “fee basis” rather than on a salary basis. If an employee is paid an agreed sum for a single job, regardless of the time required to complete it, the person will be deemed paid on a “fee basis.”

A fee payment is generally paid for a unique job rather than for a series of jobs repeated a number of times and for which identical payments are repeatedly made. To determine whether the fee payment meets the minimum salary level requirement, the test is to consider the time worked on the job and whether the payment is at a rate that would amount to at least $913 per week if the employee worked 40 hours.

Classifying Workers

Every employer should regularly review job descriptions to ensure all workers are classified properly. You could do this annually in conjunction with performance appraisals for current employees. Compare their job descriptions to the exemptions allowed by the DOL. Then specify in every job description whether the position is exempt from overtime or is hourly, nonexempt.

When you create a new position, consider the implications of the classifications. If you can design the job to fit an exemption, do so. That may mean raising the minimum salary to meet the test or adding a minimum education requirement that qualifies the position for the administrative or professional exemption.

Also, some states have more generous overtime rules than the federal ones. So, be sure to check with your state labor department before making changes to employee overtime classifications.
Source: http://www.businessmanagementdaily.com/