Many employers are expressing concerns about the increasingly aggressive regulatory posture of federal agencies charged with enforcing labor and employment laws. The Department of Labor sometimes seems to presume that employers are guilty of violating employment laws until proven innocent.
A few days ago I mentioned the proposed OSHA Super-Rule, “I2P2,” that some employers estimate would cost them $3,000 per employee per year. Not to be outdone, the Wage & Hour Division of the Department of Labor is working on its own super-rule related to misclassification of non-exempt employees.
The Wage & Hour Division’s regulation would require employers to conduct a written analysis of each employee’s status to certify whether such employee is properly designated as “exempt” from the overtime requirements of the Fair Labor Standards Act. A copy of the written analysis must then be given to the subject employee(s) and kept on file in case of an inspection by the Wage & Hour Division.
Yes, employers chafe at yet another recordkeeping mandate, but that’s far from their primary concern. Misclassification/overtime lawsuits are among the most financially ruinous causes of action an employer can face. A seemingly minor classification or compensable time error can result in enormous back-pay liability. Employers rightfully fear that the Wage & Hour regulation would prompt a flood of lawsuits, with the written analysis providing plaintiffs’ counsel a handy roadmap for litigation.
Without providing a safe harbor for employers who conduct the required analysis in good faith, the regulation appears more punitive than remedial. The federal government should insure that employees’ wages are paid in accordance with the law. At the same time, the government shouldn’t lose sight of the fact that a wage presumes a job.
— Peter Kirsanow is a former member of the National Labor Relations Board.
WHY is it the job of the Federal government to ensure that wages are paid? Is this not a function better suited to the State government?
Reply to this commentLinkReport AbuseIf I were going to start a business, I would hire only temporary workers. There are agencies that provide skilled and unskilled workers. Even engineers and the like can be hired on a temporary basis. Contract laborers work generally without receiving any benefits but at a higher than usual wage. The agencies are responsible for paying them, and invoice the customer for whom they do work based on the number of hours and agreed rate (which is higher than what the employee actually is paid).
I have been a contract laborer and it's not bad. It also doesn't cost the company vacation pay, severance pay, etc. when the people aren't needed anymore.
Reply to this commentLinkReport AbuseTo be fair, employers classifying employees as exempt when they are not to avoid paying them overtime is VERY common.
When caught they just claim they were mistaken. Ooopsie.
An employer presently is required to determine whether an employee is exempt or not and presumably goes through a thought process in making this determination. It doesn't seem inappropriate that he document the process he uses to reach this conclusion. Similar procedures are required to determine the amount of withholding, etc.
One can make a good case that overtime regulations should be re-examined, but as with immigration laws they shouldn't just be ignored because they're inconvenient.
Reply to this commentLinkReport Abuserimfrel,
Reply to this commentLinkReport AbuseBingo! You got that right! Thanks to government, being a contractor could be the only way one can find work. I would never hire anyone other than a contractor or freelancer to do something I can't, but how do manufacturer's do that? Send the jobs overseas, that's how. The Labor Department needs to be abolished.
Find the tiny number of companies that abuse wage regulations, fine the bejeebers out of them, and leave everyone else alone.
Reply to this commentLinkReport AbuseThis adminstration seems to be bound and determined to drive all private employers out of business or overseas.
That way everyone left can be fully dependant on govt for a paycheck.
Reply to this commentLinkReport AbuseThe sad fact is that if Labor wants to find violations of classification, etc., they need only review the federal employee lists. That along with de facto personal services contracts. Anyone wishing to help the cause of labor would do well to set their sights on the federal agency violations.
Reply to this commentLinkReport AbuseShould have read the Kagan thesis "Presidential Administration". Then you will know what the plan is.
Reply to this commentLinkReport AbuseWorse still, it's an attempt to do by regulation what could not be done by legislation. Congress refused to pass the Employee Misclassification Prevention Act. The regulation is the same thing.
Reply to this commentLinkReport AbuseMarkW, the flaw in their plan is that there will be no money for the government to provide a paycheck. The great socialist paradises survived by exploiting natural resources, i.e., unsustainable mining, extraction and wholesale environmental destruction. The Chinese survive only because they embraced free enterprise to a point but still aren't creating the methods to add value as a real free enterprise system causes the competing individuals to do.
Government strangled enterprise almost did us in in the late 1970s. Reagan and the deregulators gave America a bit of fresh air bit not before it had killed low skill manufacturing in the US. But as soon as the Dems returned to power, they started tightening the grip again. They are going whole hog under Obama.
The real question is, is there a Republican candidate who can sell a return to government guided enterprise with a light hand. Few of the beltway crowd seem to understand this. And, to keep American productivity safe, they'll need to break a few of the government's fingers to loosen them from American's throat.
Reply to this commentLinkReport AbuseAs an employer of 50 people, I have 5 exempt managers in 5 different departments. I have to go through a three part test to determine their status. Even though they run the three departments, get more time flexibility, make more money etc., I have still had some of them try to claim overtime. If I had to pay them overtime, it would kill the business. It is making it hard for small businesses to succeed.
Reply to this commentLinkReport AbuseThe I2P2 has been in place for over 20 years and has saved businesses both large and small tens of thousands of dollars each year. It is a proactive regulation/safety program to help reduce accidents in the workplace. It saves lives and money. A win-win for all.
Wage and Hour? Can't argue that:)
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