today:
104
yesterday:
179
Total:
1,001,200

Articles about Careers

HR Disciplines U.S. offers tips on avoiding overtime pay

HR-Consultant 2012.07.07 19:14 Views : 581

U.S. offers tips on avoiding overtime pay

New labor rules expected to take effect early this year

updated 1/5/2004 6:33:40 PM ET 2004-01-05T23:33:40
    The Labor Department is giving employers tips on how to avoid paying overtime to some of the 1.3 million low-income workers who would become eligible under new rules expected to be finalized early this year.

The department's advice comes even as it touts the $895 million in increased wages that it says those workers would be guaranteed from the reforms.

Among the options for employers: cut workers' hourly wages and add the overtime to equal the original salary, or raise salaries to the new $22,100 annual threshold, making them ineligible.

The department says it is merely listing well-known choices available to employers, even under current law.

"We're not saying anybody should do any of this," said Labor Department spokesman Ed Frank.

New overtime regulations were proposed in March after employers complained they were being saddled with costly lawsuits filed by workers who claimed they were unfairly being denied overtime. But the regulations themselves have stirred controversy over how many workers would be stripped of their right to overtime pay.

The issue is being seized by Democrats in their attempt to win back Congress and the White House.

 
A final rule, revising the 1938 Fair Labor Standards Act, is expected to be issued in March. The act defines the types of jobs that qualify workers for time-and-a-half if they work more than 40 hours a week.

Overtime pay for the 1.3 million low-income workers has been a selling tool for the Bush administration in trying to ease concerns in Congress about millions of higher-paid workers becoming ineligible.

But the Labor Department, in a summary of its plan published last March, suggests how employers can avoid paying overtime to those newly eligible low-income workers.

"Most employers affected by the proposed rule would be expected to choose the most cost-effective compensation adjustment method," the department said. For some companies, the financial impact could be "near zero," it said.

Employers' options include:

  • Adhering to a 40-hour work week.
  • Raising workers' salaries to a new $22,100 annual threshold, making them ineligible for overtime pay.
    If employers raise a worker's salary "it means they're getting a raise — that's not a way around overtime," Frank said. The current threshold is $8,060 per year.
  • Making a "payroll adjustment" that results "in virtually no, or only a minimal increase in labor costs," the department said. Workers' annual pay would be converted to an hourly rate and cut, with overtime added in to equal the former salary.

Essentially, employees would be working more hours for the same pay.

The department does not view the "payroll adjustment" option as a pay cut. Rather, it allows the employer to "maintain the pay at the current level" with the new overtime requirements, said the Labor Department's Wage and Hour Division administrator, Tammy McCutchen, an architect of the plan.

Labor unions criticized the employer options.

Mark Wilson, a lawyer for the Communications Workers of America who specializes in overtime issues, said the Bush administration was protecting the interests of employers at the expense of workers.

"This plan speaks volumes about the real motives of this so-called family-friendly administration," Wilson said.

He says cutting workers' pay to avoid overtime is illegal, based on a 1945 Supreme Court ruling and a 1986 memo by the Labor Department under President Reagan.

 
But McCutchen disagreed. If changes were made week to week to avoid overtime, they would be illegal. A one-time change is not, she said.

"We had a lot of lawyers look at this rule. We would not have put that in there if we thought it was illegal," she said.

"Unless you have a contract, there is no legal rule ... prohibiting an employer from either raising your salary or cutting your salary," she said, adding, "We do not anticipate employers will cut people's pay."

The final plan does not require approval from Congress. That hasn't stopped Democrats and some Republicans from trying to block the rule, thus far unsuccessfully, out of fear that millions of workers would become ineligible for overtime.

Department officials say about 644,000 higher-paid workers would lose their overtime eligibility. But the proposal says 1.5 million to 2.7 million workers "will be more readily identified as exempt" from overtime requirements. Labor unions claim the figure is about 8 million.

The Labor Department is aware of lawmakers' concerns has read tens of thousands of comments about the proposal, McCutchen said.

"We understand what the public concerns are and we're going to be doing our best to address them," she said. "It's important to allow us to finish that process so we can back up our words with some good-faith action."

 

for more details,

http://www.msnbc.msn.com/id/3882629/ns/business-us_business/t/us-offers-tips-avoiding-overtime-pay/

No. Subject Date Views
92 California Overtime Violations FAQ - What is considered a "work week?" 2012.07.07 564
91 Investigation Interview Protocol for Employee Interview 2011.12.31 573
90 Travel Time Policy - good example 1 - may be good for your company too. 2012.01.22 578
89 Office Refrigerator Etiquette 2012.07.01 581
» U.S. offers tips on avoiding overtime pay 2012.07.07 581
87 Travel Time Policy - good example 3 - League of Minessota Cities 2012.01.22 584
86 Employers must post the employee notice 10 days before a statewide election - form attached 2012.07.07 599
85 Liability and Relationships - Office Relationships-Supervisors & Subordinates 2011.12.28 602
84 Travel Time Policy - 노동청의 규정은 어떻게 되어 있을까요? 2012.01.22 603
83 Employee vs. Independent Contractor – Seven Tips for Business Owners 2011.12.18 604
82 California Overtime Violations FAQ - How much will a California Labor Law Attorney Cost? 2012.07.07 604
81 California Overtime Violations FAQ - Can my employer require me to work overtime? 2012.07.07 605
80 California Overtime Violations FAQ - I don't supervise anyone. How can I determine whether I have been misclassified as exempt? 2012.07.07 605
79 Examples of Conduct that May be Unlawful 2011.12.28 607
78 Rest Break Compliance 2012.03.31 609
77 SB 459: Penalties for employers who misclassify employees as independent contractors. 2011.12.18 612
76 Wage - Time Clock Payment 에 관한 알아두면 좋은 상식 2012.03.31 612
75 Sexual Harassment- Key Elements of Investigation Procedures 2011.12.31 613
74 Sexual Harassment- Complaint Procedures 2011.12.31 615
73 Best Practices for Limiting Employer Liability (가장중요한 대책들입니다.) 2012.01.02 615