Landrum Human Resources Companies Inc.
04/16/2024 | News release | Distributed by Public on 04/16/2024 13:07
Webinar Highlights: FLSA Compliance for HR Managers
As HR managers, it is essential to understand and comply with the Fair Labor Standards Act (FLSA) to ensure fair compensation practices and avoid penalties.
The FLSA regulates various aspects of employment, including minimum wage, overtime pay, and classification of employees.
In this wrap up of our recent FLSA Compliance webinar, we will discuss the importance of FLSA compliance and its impact on your business.
Non-compliance with the FLSA can lead to severe consequences, including penalties, back pay, liquidated damages, and criminal prosecution. Therefore, it is crucial for HR managers to have a clear understanding of the FLSA and ensure compliance within their organizations.
To properly classify positions as exempt or non-exempt, HR managers need to understand the criteria outlined in the FLSA, including the salary basis test and the duties test. The salary basis test determines if the position is guaranteed a weekly salary that meets the current salary threshold. As of 2020, the weekly salary threshold was $684 per week. The duties test evaluates the primary job duties and responsibilities of employees to determine exemption status. It is crucial to classify employees accurately to avoid potential violations and penalties.
The duties test includes positions such as:
For instance, the salary threshold for exempt employees may increase this year, requiring adjustments in compensation practices. Additionally, reinstating the economic reality test for contractor classification requires a thorough review of independent contractor relationships within the organization.
By proactively addressing these proposed changes, conducting internal audits, and updating policies and procedures, HR managers can ensure compliance and mitigate potential risks for the organization.
HR managers should familiarize themselves with the pay transparency laws in their respective states. Implementing pay transparency measures can help organizations identify any pay disparities and take corrective actions to ensure fairness.
HR managers should actively work towards pay equity by conducting market research, establishing fair job grades, and setting salary ranges based on research and market data. By ensuring fair and equitable pay, organizations can attract and retain top talent while complying with FLSA requirements.
The FLSA regulates various aspects of employment, including minimum wage, overtime pay, and classification of employees.
In this wrap up of our recent FLSA Compliance webinar, we will discuss the importance of FLSA compliance and its impact on your business.
Understanding the FLSA
The FLSA is a federal law that establishes minimum wage, overtime pay, record-keeping, and child labor standards for employers. It covers businesses with at least 2 employees, any company with an annual revenue volume of $500,000 or more, or any hospital, residential healthcare facility, or government agency. Additionally, individuals involved in interstate commerce are also covered by the FLSA.Non-compliance with the FLSA can lead to severe consequences, including penalties, back pay, liquidated damages, and criminal prosecution. Therefore, it is crucial for HR managers to have a clear understanding of the FLSA and ensure compliance within their organizations.
Compensation and FLSA Compliance
One key area regulated by the FLSA is compensation. It distinguishes between non-exempt and exempt employees and determines their eligibility for overtime pay. Non-exempt employees are paid hourly and must receive overtime pay for hours worked beyond 40 in a workweek. Exempt employees, on the other hand, are paid on a salary basis and are not eligible for overtime pay.To properly classify positions as exempt or non-exempt, HR managers need to understand the criteria outlined in the FLSA, including the salary basis test and the duties test. The salary basis test determines if the position is guaranteed a weekly salary that meets the current salary threshold. As of 2020, the weekly salary threshold was $684 per week. The duties test evaluates the primary job duties and responsibilities of employees to determine exemption status. It is crucial to classify employees accurately to avoid potential violations and penalties.
The duties test includes positions such as:
- Executive
- Administrative
- Professional
- Outside Sales
- Highly Compensated Employees
- Others With Specific Exemption
Proposed Changes and Compliance
The FLSA is subject to proposed changes, such as updates to overtime rules and contractor classification. HR managers must stay informed about these changes and ensure their organizations are prepared to comply.For instance, the salary threshold for exempt employees may increase this year, requiring adjustments in compensation practices. Additionally, reinstating the economic reality test for contractor classification requires a thorough review of independent contractor relationships within the organization.
By proactively addressing these proposed changes, conducting internal audits, and updating policies and procedures, HR managers can ensure compliance and mitigate potential risks for the organization.
Pay Transparency and Pay Equity
Another important aspect related to FLSA compliance is pay transparency and pay equity. Many states have implemented pay transparency laws to address salary disparities and encourage employers to prioritize pay equity within their organizations.HR managers should familiarize themselves with the pay transparency laws in their respective states. Implementing pay transparency measures can help organizations identify any pay disparities and take corrective actions to ensure fairness.
HR managers should actively work towards pay equity by conducting market research, establishing fair job grades, and setting salary ranges based on research and market data. By ensuring fair and equitable pay, organizations can attract and retain top talent while complying with FLSA requirements.