Tag Archives: Exempt

Taking Care of Your Employees After A Natural Disaster

Employers along the Texas Gulf Coast are trying to determine how best to help their employees in the emergency that is the aftermath of Hurricane Harvey. As business owners and managers, we have the responsibility to try to take care of our most important business resources–our human resources–in the face of catastrophe.

While lots of websites and plans are in place telling a business about stocking emergency supplies, sheltering in place and creating evacuation plans, there are fewer guides for what to do for your employees in the long days and weeks afterwards.

After any natural disaster, whether it is a hurricane on the Texas Coast or a tornado or blizzard in the Texas Panhandle, you are going to first need to check on the well-being of your employees. For that reason, you need to keep updated phone records and emergency contact information for your employees in a safe place, preferably electronically so that you can access it from any location.

Organize a group text, a telephone tree or a call-in phone number so you can determine where each employee is, if each employee is physically okay, and whether the employee will be able to report to work. Don’t assume that just because you can get the business open that you will have employees to work in it.

Then you need to worry about money, because your employees certainly are worrying about it. According to a large survey in 2016 by GoBankingRates.com, half of all Americans have less than $1000 in their savings account. Even more sadly, 34% had no savings at all.

In addition, 60% of workers in America are paid by the hour and federal law only requires employers to pay an employee for hours actually worked. So being away from work even for a day or two can have devastating financial consequences for many employees.

Some will brave any conditions to make sure they don’t risk losing a day of pay or losing their job. The New York Times illustrated this in a story about the first day after Houston started getting the four feet of rain that Hurricane Harvey eventually dropped on that city.

Gloria Maria Quintanilla appeared as a speck on the horizon, wading through waist-high waters in the middle of the road with a sack thrust over one shoulder and an umbrella perched on the other. Ms. Quintanilla, 60, seemed to epitomize Houston’s work ethic, its resolve and its shock.

“I worked at the hotel up there,” she said when a reporter approached. As she walked, she explained that she was an immigrant from El Salvador, here since 1982. She makes $10 an hour washing and ironing sheets and towels at the Doubletree.

She had started the journey from home more than an hour before.

“It was my day to work, and I’m a very responsible person,” she said, speaking in Spanish. “I had no idea it was going to be like this.”

The large majority of your hourly employees need to work, want to work and want to fairly earn their pay. However, when their homes are underwater or destroyed in a tornado, they may need extra help. Even if you don’t normally provide salary advances or employee loans, in times of natural disasters, you may need to bend the rules and allow those.

Continue reading Taking Care of Your Employees After A Natural Disaster

Don’t Forget About the Duties Tests for Exempt Employees

While a federal judge in Texas last week set aside the requirement to pay exempt employees at least $47,476 per year, nothing has changed about the duties tests for exempt employees, and that is where many employers get into trouble. Under the old rules (which are new again), the Department of Labor was collecting $140 million per year for overtime violations.

So even though the judge’s injunction has relieved you as an employer from the obligation to pay yourcowmc8qf8a-crew-1r managers almost $50,000 per year, you still have to be vigilant that you are paying salaries only to those employees who actually are exempt from the Fair Labor Standards Act based on the duties that they perform.

Determining that an employee is exempt from the overtime rules and can be paid on a salary without reference to the number of hours worked each week by that employee has always been a two-step process:

  1. The employee you have designated as a manager, professional or administrative worker must be paid at least $23,660 per year. This is the amount that was in effect before the new rule and the judge’s injunction, which returns us to the status quo of $23,660 per year ($455 per week). But unlike the new rule, bonuses cannot be used to get the exempt employee to that amount. So you have to pay the salary of $23, 660, and,
  2. The employee you are calling exempt must perform certain duties to legally be considered exempt. These duties tests have tripped employers up for years, long before the salary increase was even proposed. And now that the salary increase has been enjoined, your focus as an employer should be back on these duties tests to determine if you really can pay an employee as an exempt, salaried employee without worrying about overtime.

So, in addition to making at least $23,660 per year, your exempt employee must pass all of the duties tests for at least one of the following categories if you want to claim that you don’t have to pay overtime to that particular employee:

Executive Employees Duties Test:

  1. The employee’s primary duty (the most important duty and the one that takes up a significant amount of his/her time) must be the management of a customarily recognized department or subdivision (such as a stand-alone store). Management includes the hiring, training, scheduling, disciplining and supervising of employees and/or the planning and controlling of the budget, workflow, safety and compliance of a department; and
  2. The executive employee must customarily and regularly direct the work of at least two other full-time employees (not full-time equivalents), and
  3. The executive employee has the authority to hire and fire other employees, or at least the executive employee regularly makes recommendations that are relied on in the determination of an employee’s hiring, promotion, firing.

Learned Professional Duties Test: Continue reading Don’t Forget About the Duties Tests for Exempt Employees

Overtime Rules: Are You Ready?

Reminder: The Department of Labor’s final rules regarding the overtime exemption requirements go into effect December 1, 2016. So in the next month, you must get in compliance with these rules:

  • Salary increase for certain exemptions. The minimum salary requirement for administrative, professional, and executive exemptions dramatically increases from $455 per week ($23,660 annually) to $913 per week ($47,476 annually). If you aren’t paying salaried employees $47,476 per year by December 1, 2016, you will be exposing your business to risky Department of Labor investigations and employee lawsuits.
  • Increase for highly compensated employees. The minimum total compensation required for the highly compensated employee exemption increases from $100,000 per year to $134,004 per year, which must include at least $913 paid on a weekly salary basis.
  • A portion of certain bonuses count. Employers may use nondiscretionary bonuses (generally those announced or promised in advance), incentive payments, and commissions, to satisfy up to 10 percent of the minimum salary requirement for the administrative, professional, and executive exemptions, as long as these forms of compensation are paid at least quarterly.
  • Automatic updates. Every three years, the DOL will adjust the minimum salary requirement, meaning you will need to review and adjust (if necessary) exempt employees’ salaries every three years as well.


Don’t wait until December; take steps NOW to prepare for the rule changes:

  • Ensure that your “exempt” employees are actually exempt. It takes more than the proper salary for an employee to be exempt. Call me for help with reviewing the primary duties your exempt employees actually perform to ensure they meet the DOL’s criteria for administrative, professional, and executive exemptions.
  • Compare the costs. If your exempt employees’ salaries fall below the new minimum, you will generally have to either: 1) raise their salaries to the new requirement; or 2) reclassify the affected employees as non-exempt and start following the overtime rules whenever they work more than 40 hours in a workweek. Review exempt employees’ salaries and their typical number of hours worked to determine which option is more cost-effective for your business.
  • Review your timekeeping policies. Get from me written policies and procedures for your business to ensure all non-exempt employees are accurately recording all time worked. I can provide training for employees on proper timekeeping practices and otherwise complying the compensation laws.

New Overtime Rule Changes Salary Basis Requirement

Do you pay any employee on a salary basis instead of paying them hourly and overtime? Of course you do, so you need to be very aware of the new final overtime rule issued by the U.S. Department of Labor on May 17, 2016.

You must pay your salaried employees at least $913 per week ($47,476 per year) beginning December 1, 2016, or you will be in violation of the Fair Labor Standards Act (which you do not want to violate).

In the past, salaried employees had to be paid $455 per week ($23,660 per year) to qualify as an employee exempt from the FLSA’s requirement of paying overtime for every hour over 40 worked in any one workweek. That salary basis has doubled under the new regulations.

In addition to meeting this increased salary level, the salaried employee must perform the duties of an exempt employee (the white collar exemptions: executive, a professional or an administrator). These duties tests are much more difficult to meet than most people think, so don’t just assume that your salaried employees are actually exempt. For example, not every “manager” is an “executive exempt employee”, who under the FLSA must have the power to hire and fire and must supervise at least 2 full-time employees, as well as being in charge of a recognizable store, division or branch of your business.

This increase in the threshold salary required to consider an employee exempt could change the classification of many Panhandle-area retail managers and assistant managers, human resources directors, marketing professionals, bookkeeping employees, project managers, foremen, performers, and other employees who have not been earning overtime in the past.

Now those exempt employees will either get a raise to get them over the $913 per week threshold or they will have to be changed to nonexempt, hourly employees who earn overtime. Either way, it could mean an overall increase for the employee and higher payroll costs for the employer.   Continue reading New Overtime Rule Changes Salary Basis Requirement