Paying employees is not as simple as it appears. Complex federal and state laws and regulations govern compensation practices. Making even one of the following mistakes can cost you a lot in money, time and bad publicity. Go to www.dol.gov for good information regarding federal Fair Labor Standards Act (FLSA) requirements.
- What Do You Mean I Have To Pass A Test? Or, Tales From Exempt Employees Who Aren’t. Many organizations have some employees misclassified as exempt who are really nonexempt and must be paid overtime. Remember, the Department of Labor has very specific tests that must be met before an employee may be classified as exempt.
- We’ll Just Pay Her A Salary, That Way There’s No Overtime. Or, Return Of Exempt Employees Who Aren’t. The FLSA exemption tests include specific job duties and requirements. Simply paying someone on a salary basis vs. an hourly wage doesn’t make her exempt from overtime.
- That’s Not Really Work Time. Failing To Pay Nonexempt Employees For “Hours Worked.” Starting early, working late, working through lunch, or doing work at home would all be “hours worked” and considered paid time. Employees can’t “volunteer” to work a little extra or to work “off the clock.” Don’t forget about travel time and training which can also be compensable under certain circumstances.
- Oh, It’s Close Enough. Not Correctly Tracking Overtime. Do you have an accurate system in place? Is it reliable? Consistent? Do you “round” appropriately?
- Take Next Friday Off. Using “Comp Time” Improperly. Private sector employers need to be especially careful regarding “comp time.” Basically, in those settings, compensatory time only exists within the workweek. Comp time can’t be given instead of overtime. The public sector works under some different rules. (more…)
Source: Reposted from an online article by John W. Schoen, Senior Producer, msnbc.com, 8/11/09
Feel like you’re working a lot harder these days, putting in longer hours for the same pay — or even less? The latest round of government data on worker productivity indicates that you probably are.
The Labor Department said Tuesday that the American work force produced, at an annual rate, 6.4 percent more of the goods they made and services they provided in the second quarter of this year compared to a year ago. At the same time, “unit labor costs” — the amount employers paid for all that extra work — fell by 5.8 percent. The jump in productivity was higher than expected; the cut in labor costs more than double expectations.
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Recession-starved employee salaries have scarcely grown this year, and early predictions for 2010 aren’t looking much better. Two surveys released earlier this week found employers have increased salaries this year by the smallest percentage in decades.
Human resource consultants Watson Wyatt Worldwide, Inc. and Hay Group estimate that median pay raises for 2009 ranged between 2% and 3%. The U.S. Labor Department says pay for the average worker increased 2.2% in the year ended March 31, down from 3.2% in the year-earlier 12 month period.
For next year, the firms are projecting slightly bigger raises of 3%. That’s the smallest forecast increase in the 29 years Hay Group has done its survey.
The reasons are clear: In a recession that has eliminated 6.5 million jobs since the end of 2007, millions of workers have suffered pay cuts or have been forced to take time off withouth pay. Economists expect the U.S. economy to resume growing later this year, but the labor market typically recovers more slowly.
Analysts say the findings demonstrate the depth and volatility of the recession. A year ago, the consulting firms predicted average workers would see pay increases of 3.5% to 4% this year. But the new surveys show that raises fell well short of that.
Source: Salt Lake Tribune, July 20, 2009, Michael Sanserino
The Wall Street Journal reported on 12/16/08 that employers have done a sudden about face in regard to projected pay raises for 2009. Many who as recently as October said they were barely modifying their salary budgets in 09, have now changed their tune bringing projected annual pay raises for some workers to a 30 year low.
Overall, workers are now projected to receive average annual merit increases of 3% in 09 according to a new survey by Hewitt Associates. When polled just 2 months ago, employers said they had already lowered their budgets to 3.6% from 3.8% in July.
Pay for some workers may go as low as 2.5%, a clear signal that companies are concerned about managing their fixed costs during such a challenging worldwide business climate.
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The earnings gap between women and men who work full time grew slightly in 2007, as men’s weekly pay incresed more than that of women, according to figures released recently by the Labor Department’s Bureau of Labor Statistics (BLS).
Among the nation’s 106.1 million full-time wage and salary workers, median usual weekly earnings of women rose to $614 last year, up 2.3%, or $14, from the median of $600 in 2006, BLS said in a report posted on its Web site. The median is the midpoint, meaning that half of the workers earned more than that amount while the other half earned less.
Men who worked full time saw their earnings climb even more, to a median of $766 per week in 2007, a gain of 3.1% or $23 from $743 the prior year.
As a result, the ratio of women’s earnings to those of men declined to 80.2% last year, down from 80.8% in 2006.
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