NEW DEPARTMENT OF LABOR RULES REGARDING OVERTIME MAY EFFECT HOW EMPLOYERS STRUCTURE PAY PLANS GOING FORWARD
If your business model includes having any employees that work more than 40 hours in a given week or contemplate allowing overtime work in the future, you may want to review the new Department of Labor overtime rules slated to take effect on December 1, 2016.
The purpose for bringing this to your attention is not to provide employment or legal advice, but more specifically to draw your attention to the issue from the standpoint of potential employment practices liabilities and insurance awareness.
It’s estimated the unless employers take advantage of options available to them to respond to the changes, some employees previously not eligible for overtime benefits will be eligible under the new rules. Unfortunately, failing to fully understand the new rules exposes employers to liability lawsuits, back pay and other legal penalties relative to noncompliance.
We suggest the following actions should be considered in response to this change:
· Review the rule changes with legal counsel.
· If avoiding overtime is a goal, review your available options under the revised rules, in meeting your objectives.
· Implement policies and procedures within your organization to assure compliance.
· Consider purchasing Employment Related Practices liability insurance that includes an endorsement for Defense protection against wage and hour lawsuits.
Here is a link for your convenience to a guidance article provided by Department of Labor on this subject: https://www.dol.gov/whd/overtime/final2016/general-guidance.pdf
Please let me know if you have any questions about options available to you to insure against the potential of defense cost related to wage an hour issues as well as liabilities you may have under other Employment Related Practices.