BUSINESS WATCH

New Wage and Hour Regulations Provide Employers a Safe Harbor to Avoid Loss of “White Collar” Exempt Status By Carla Heathershaw Risko (continued)

 

 

 

The policy prohibiting improper deductions should be in place before the improper deduction occurs. To be “clearly communicated,” the policy must be easily available to employees. For example, an employer can provide a copy of the policy to each employee, can publish the policy in its employee handbook, or can include the policy on the employer’s website. The policy does not need to be lengthy – a simple statement that the employer intends to pay employees on a salary basis and will not make any deductions that are prohibited under the Fair Labor Standards Act should be sufficient. Additionally, the policy must include information on how an employee can complain about an improper deduction. It is fair to assume that the requirement of having a complaint mechanism is not met merely by letting employees complain about improper deductions, but the employer must also have a process in place to investigate and resolve such complaints. This process would, of course, include a procedure for the timely reimbursement of any deductions found to be improper.

 

If an employer complies with these requirements, loss of exempt status for executive, professional, administrative, and computer employees can be avoided, even if an inadvertent mistake in taking salary deductions is made. 

 

Along with the increased protections for employers found in the safe harbor and window of correction provisions, the new regulations have also changed the requirements an employee must meet to be eligible for exempt status as a white collar employee. Additionally, the new regulations clarify that some employees previously argued to fall under the white collar exemption do not qualify for the exemption. If you have any questions regarding the requirements for exempt status, when and how the exemptions apply or the protections of the safe harbor and window of corrections provisions, please call our office.

 

 

 

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