04 May Pay the People
One of our most prolific payroll specialists often ends hallway conversations by saying, “I’ve got to pay the people.” She doesn’t have time to chat. She knows that nothing comes before payroll. The tiniest of errors could light up the phones with calls from confused employees, so getting the pay done accurately and on time is crucial. There are no extra points for getting it right, but employee trust and confidence could be affected if it’s wrong.
The first step is classifying positions as either exempt or non-exempt. Non-exempt positions are not exempt from certain provisions of the Fair Labor Standards Act, the law that covers wage and hour issues. Non-exempt positions are not exempt from the minimum wage and overtime provisions of the law. Employees in non-exempt positions must track all time worked, report all time worked, and get paid overtime (time and 1/2) for hours worked over 40 in a defined work week.
If the position is paid hourly and is not a systems engineer or a software developer, it’s probably non-exempt. In the multi-family industry, community managers and regional managers are usually exempt while assistant managers, maintenance supervisors, maintenance technicians, leasing agents and groundskeepers are usually non-exempt. If you want to be sure that you’re in compliance with non-exempt employees:
- Start with a privileged self-audit (protected by attorney/client privilege) to determine the correct classifications for each position;
- Have a written policy that requires all non-exempt employees to track and report all time worked, including on-call time if relevant, to never work off-the-clock, and to report anyone who asks them to work off the clock;
- Train managers to understand what needs to be tracked and paid;
- Instruct non-exempt office employees to eat lunch away from the office to avoid working while they’re clocked out for lunch;
- Pay for all hours worked, and pay 1 1/2 the regular rate for overtime hours (typically any hours over 40 in a defined work week);
- Pay for training that is for the benefit of the company (even if the employee offers to do it at home); and
- Don’t go below minimum wage by deducting the costs of uniforms or other items.
Ask for help if you have questions about deductions, minimum wage (varies by state), tracking or paying overtime, training or travel pay, and other wage and hour issues. If you track the time of non-exempt employees and pay for all of the time properly, you’ll be reducing your liability. Your people will appreciate it when they are paid accurately and on time.
Scott Mastley, SPHR, MBA, is the Vice President of Human Resources for Resource Alliance. Scott is a consultant, not an attorney, so he shares his opinions, not legal advice, about increasing performance and limiting liability.