FLSA Audit Form
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Hi Everyone, we are a small company and going through reorganization. This will be a great time to audit all positions for exempt/non-exempt status and make any necessary changes. We are doing this during the next 2 weeks. Although some are very black and white others are gray depending on who looks at it.
Does anyone have "simple" audit form that can be used???
If you do and are willing to share - I will be grateful. Please post your email address as I will need to send you a note and have you reply back. Everything except the junk seems to get stopped in our Spam filters.
Thanks
Does anyone have "simple" audit form that can be used???
If you do and are willing to share - I will be grateful. Please post your email address as I will need to send you a note and have you reply back. Everything except the junk seems to get stopped in our Spam filters.
Thanks
Comments
With all the emphasis on outreach from federal agencies, DOL may have something as well. There was nothing of the sort when I needed it.
best wishes.
White Collar Exemption Duties Test Questionnaire
Executive Exemption (salary level, salary basis, duties) Test (affirmative responses define executive exemption)
1. Basis of pay (must be salary & at least $455/week ($23,660/yr))(Salary = employee is paid a predetermined amount each pay period; amount may not be reduced because of variation in quality/quantity of work performed; limited opportunities to reduce pay)
Choose one: Salary Hourly $$ (write in here)
2. Primary duty is management of the enterprise in which individual is employed (i.e., devotes more than 50% of time to managing unit or using discretionary powers, is generally free from frequent supervision, or may perform similar duties as other hourly workers paid less but on a limited or infrequent basis). Is this employee in charge of an independent business unit or customarily recognized department or subdivision of an enterprise. true false
3. Employee customarily and regularly directs the work of 2 or more other employees (who work a total equivalent of 80 hours per week). Subordinate workers must work in same department as executive. true false # FTEs
4. Employee has authority to hire/fire other employees, or provide suggestions and recommendations that are given particular weight in hiring, firing, advancement, promotion, or any other change of status of other employees. true false
Managing is:
· interviewing/selecting/training employees
· setting/adjusting rates of pay/hours of work
· directing other employees’ work
· maintaining other employees’ production/sales records for use in supervision/control
· appraising other employees’ productivity/efficiency to recommend promotions/status changes
· handling other employees’ complaints/grievances & disciplining when necessary
· planning work to be done
· determining work techniques to be used
· apportioning work among workers
· determining materials/supplies/machinery/tools to be used or merchandise to be bought/stocked/sold
· controlling flow/distribution of materials/merchandise/supplies
· providing for the safety of employees/property.
Administrative Exemption (salary level, salary basis, duties) Test (affirmative responses define administrative exemption)
1. Basis of pay (must be salary & at least $455/week ($23,660/yr))(Salary = employee is paid a predetermined amount each pay period; amount may not be reduced because of variation in quality/quantity of work performed; limited opportunities to reduce pay)
Choose one: Salary Hourly $$ (write in here)
2. Primary duty is office or nonmanual work (more than 50% of the time), and the work is directly related to management policies or general business operations of the employer or employer’s customers.Primary duties: (list) true false
3. Employee customarily and regularly exercises discretion and independent judgment with respect to matters of significance. true false
Professional Exemption (salary level, salary basis, duties) Test (affirmative responses define professional exemption)
1. Basis of pay (must be salary & at least $455/week ($23,660/yr))(Salary = employee is paid a predetermined amount each pay period; amount may not be reduced because of variation in quality/quantity of work performed; limited opportunities to reduce pay)
Choose one: Salary Hourly $$ (write in here)
2. Primary duty is work that requires knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction. Requires professional credentials and their application to current job duties:
Choose one: true false List credentials/training & how applies:
3. Employee customarily and regularly exercised discretion and independent judgment with respect to matters of significance. true false
Notes:
1. FLSA is the Fair Labor Standards Act and guarantees minimum wage and overtime pay to certain classes of employees. Exceptions to the overtime provision are “exemptions.”
2. Exemptions must be based on actual job duties, not job titles, position descriptions, salaried basis of pay, or perceptions of job duties. The default classification is nonexempt, which qualifies employees for overtime compensation for all hours worked over 40 hours in a single work week. Comp time in lieu of overtime pay is not a provision of FLSA. Nonexempt positions can be paid on a salaried basis. Employers must prove exemptions.
3. Administrative exemption is the most elusive classification and, therefore, most often misapplied. It requires that work is high level, includes more judgment and discretion rather than less, and decisions are important to the overall operation of the whole enterprise/business, not a single department or shift. Judgment / discretion must be related to overall company policy. Performing routine clerical work more than 50% of the time does not qualify as administrative exempt.
4. Professional exemption requires artistic or creative duties or duties that require advanced training / advanced degree, such as “traditional learned professions” (medicine, law, accounting, engineering). FLSA describes advanced training is more significant than OTJ experience or certificate / apprenticeship programs. Simply having an advanced degree does not warrant professional exemption. Employee must be working in the field of study and must satisfy duties test for type of work performed.
5. Employees paid on an hourly basis are nonexempt no matter what their work duties are, with the exception of highly compensated employees (earning more than $100,000 annually).
6. If there is any doubt, err on the side of conservative and classify a position as nonexempt.
7. OT compensation is 1.5 times regular rate of pay and is a federal requirement for nonexempt positions. If there is a “reasonable knowledge” that overtime is being worked, regardless of where the work is performed (office, home, etc), an employer is obligated to pay overtime. Failing to pay overtime for hours worked over 40 in a single work week can not be used as a form of discipline. Employees who work unauthorized overtime must be paid but should be disciplined for failing to comply with management or budget policies. Nonexempt employees may not volunteer their services to perform their regular job duties and may not waive their rights under FLSA.
8. Employer liability for FLSA violations can be very expensive. FLSA allows for class action suits, attorney fees, correction backward for two years (3 years if violation is willful), and damages in an amount equal to the pay correction. An executive or manager can be held individually liable if the executive / manager controls the organization, derives profit from the business, or sets employee compensation and personnel policies.
9. An employer’s failure to track work hours violates FLSA record keeping rules. In addition, if the employer loses a legal challenge on an FLSA practice and is found liable, inadequate records will ensure that whatever an employee reports will be accepted as fact, even if it isn’t.
10. Reclassifications must be managed carefully. If errors are identified, or if job duties have changed to the extent that an exemption is changed, corrections must be made as promptly as possible. However, changes can have far reaching implications. Reclassifications may involve more than one incumbent employee. Reclassifying an exempt position to nonexempt will require that the employer have adequate records of time spent by the employee on the job. If the reclassification is due to error and the error can not be disproved during the last 2 to 3 years, the employee may be entitled to back overtime pay for the period of error. If the reclassification is due to a change in job responsibilities, adequate records of time must be solicited as of the time of correction and forward. Also, adequate records documenting the time at which job responsibilities changed and the nature of the change must be available to support that reclassification did not result from error.
I am the author of several of M. Lee Smith Publisher's FLSA publications. The company asked me to let you know that the report "Overtime Revisited: The DOL's Final Regulations" contains a step-by-step flow chart for all of the white collar exemptions. That report is available for purchase in the HR Executive Special Reports section of [url]www.hrhero.com[/url].
Let me know if you have any questions.
Julie Athey