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not to record all of their time, especially
if you are trying to limit them to forty
hours a week. When employees are
working off-the-clock, it never works REMEMBER, UP TO 10 PERCENT OF THE REQUIRED
out well for employers. SALARY UNDER THE NEW RULE CAN BE IN
Another trap we see when trying THE FORM OF A NON-DISCRETIONARY BONUS,
to limit employees to just forty hours
per week — penalizing employees for INCENTIVE PAYMENT OR COMMISSION.
working unauthorized overtime. While
the common sense approach might be
to withhold payment for unauthorized 1. You have until December 1. Have 4. Consider the use of the “fluctuating
work time, chances are your business those employees who will be non- workweek” method of calculating
did in fact benefit from the work. To exempt start recording their time overtime, which results in half-time
avoid any claim that you violated the now by punching a time clock or overtime instead of time-and-a-half
Fair Labor Standards Act by refusing to keeping up with their hours worked overtime. This method, however, is
pay for overtime work, you should dis- on a day-to-day basis in some other extremely complicated to administer.
cipline (such as verbal or written coun- reliable way. This helps in two ways
seling) employees for any unauthorized — it gives you an idea of just how 5. Bite the bullet and increase the pay
work time, but pay them for the time many hours a week they work, and it of those now-exempt employees
worked. gets them in the habit of accurately making less than the new standard.
Another trap when making the recording their time. From there, you Remember, up to 10 percent of the
transition relates to home computers can do two things — either divide the required salary under the new rule
and smartphones. Previously exempt employee’s current salary by forty can be in the form of a non-discre-
employees who could work and com- (40) hours and pay an additional tionary bonus, incentive payment or
municate with you 24/7 are now on- weekly amount for overtime, or con- commission.
the-clock. Anything other than a very vert an employee from salaried to
minimal amount of time spent work- hourly based on actual hours worked 6. Make sure you have a written policy
ing or communicating should now be in a week, so that the cost is roughly warning employees about working
compensated. These previously exempt the same. This will not be an exact off-the-clock and mandating that
employees may have the hardest time science — there will undoubtedly be they accurately record their time.
making the transition to recording their variations in the hours worked week- Talk to your managers about this as
time. You will need to help them with by-week — but it will get you close. well — it never works out well for an
that transition and stay on them about employer when an employee works
accurately recording their time. 2. Start talking to your managers and off-the-clock, especially if a manager
One “silver lining” to the upcom- employees now about the transition knew about it.
ing changes — perhaps now is a good and why it’s happening. Although
time to transition those employees who no one is being demoted and no job Additionally, the Department of
might be “iffy” in terms of whether duties are being changed, some of Labor has provided a guidance docu-
they are truly exempt to a non-exempt your previously exempt employees ment for private businesses.
status. Thousands of previously sala- will feel as if they have taken a step This transition will not be easy,
ried-exempt employees in Arkansas will backwards. Help them ease into but at least you have about five months
see their positions turned into over- the new “reality” all businesses are (instead of 30-60 days) to adjust to the
time-eligible positions, so making the facing. Department of Labor’s new rules. Don’t
change now gives you some cover. wait until the last moment to start your
3. Decide how you are going to handle transition.
HOW TO PREPARE after-hours communications/work
Will there be bumps in the road for — are you going to take away 24/7 Stuart Jackson and John Davis are part-
ners on Wright Lindsey Jennings’ Labor
a lot of employers making the transi- access through computers and smart & Employment Team. You may e-mail
tion? Undoubtedly. But, you can pre- phones, or are you going to ensure them at wjackson@wlj.com and jddavis@
pare by doing the following: that any work time is recorded and wlj.com. You also may follow Wright
compensated? Lindsey Jennings’ Labor & Employment
Team on Twitter @WLJEmployment.

1
In addition to the salary level requirement, other factors help determine whether an exemption from the minimum wage and overtime requirements
applies. In other words, just because you pay someone $913 a week does not automatically make that person an exempt employee.
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