Back in May, the Department of Labor released new rules regarding overtime pay and full time employees. Since then, some businesses have had issues with implementation. You don't want that to happen to you, or you could be risking some major headaches and financial penalties.
The American Oil and Gas Reporter has some suggestions to make sure you stay in compliance:
- The first step is to audit all payroll practices. Otherwise you can't be certain all work hours are being recorded and overtime is being calculated properly.
- Put it in writing. Make sure you have a written agreement with all employees specifying what their compensation plan is, confirming that they understand how their pay will be calculated.
- Beware of bonuses. This is where it gets tricky. Is the bonus being awarded as an incentive for workers to meet productivity, attendance, or other performance-based targets? If so, the amount of the bonus must be averaged over the period that it applies to, which raises the worker's hourly rate. In turn, if your employee works any overtime during that period, you will be required to pay time-and-a-half the hourly rate at a higher rate, due to the bonus. There are also other benefits that can apply, including lodging, gas, and meals. This is a sticky issue that your CPA can help clear up.
- Arbitration agreement. You may want to include an agreement requiring arbitration of any claims related to employment, raises, and promotions. Include a provision requiring the employee to bring any claims as an individual, and not as part of a class action suit.
The full article from The American Oil & Gas Reporter can be found here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
