President Obama directed the Department of Labor in March to come up with a way to update overtime pay rules to reflect the “changing nature of the American workplace” and to make them more” in keeping with the intention of the Fair Labor Standards Act.” The review is intended to focus on the current “White Collar” exemptions which exclude positions that are “executive,” “administrative,” “professional,” “outside sales” and certain “computer” professions from the requirement of paying overtime pay for work over 40 hours per week.
Based upon that federal administrative scrutiny of the traditional white collar exemptions, employers would be well served to evaluate all positions currently believed to be exempt. While not always well known, Wisconsin also maintains its own laws regarding minimum wage and overtime. These state laws are not always the same as the better known federal laws. There have also been some recent changes in state law that again provide employers an added incentive to evaluate exempt positions and its recording keeping protocols.
One historical area of confusion under state law has centered upon the degree to which an employer must keep a record of hours worked by exempt employees. Under federal law, an employer does not need to keep the specific hours of exempt employees. However, under state regulations, an employer was obligated to keep such records. During the past legislative session, the Wisconsin legislature passed a change to Section 104.09 of the Statutes clarifying that an employer is not required to keep a record of the hours of employment of an employee who is exempt and who is not compensated on an hourly rate basis. The change was helpful to employers with the state law now being more consistent with the requirements under federal law. Yet now, in the absence of records, an employer is best served to make certain that exempt employees truly meet the test for the exemption or significant overtime time costs could result if the exemption status is incorrect.
A second modification or clarification was recently made by the Wisconsin Court of Appeals in its review of collective bargaining agreement language that provided for an unpaid twenty (20) minute break. Even though negotiated between the company and union, the Court held that under state law, an employer must pay the employees for the past unpaid twenty (20) minute breaks, where state law requires employers to pay for breaks of less than thirty (30) minutes and no waiver was sought from the State by the employer. While federal law in some limited circumstances might allow for non-payment for breaks less than thirty (30) minutes, state law required that such breaks be paid.
As changes continue to occur, employers once again are advised to audit their pay and overtime policies. By doing so, they can avoid what could result in significant additional costs for pay and overtime payments. Relying on either the federal law or state law alone is not sufficient.
This article was published on June 25, 2014 in The Business News.