Is Your California Company at Risk for Overtime Liability?
Thanks to cell phones, laptops, and other mobile devices, communication between employers and employees is just a few clicks away. No matter how you send your communication, it is bound to get read in a timely fashion. Which is a good thing, right? Not so much.
Overtime Under the Fair Labor Standards ActTechnology has made it too easy for us to communicate with our employers and employees, and as such, it has created an entirely new legal issue that employers must be weary of. If you are a Pleasanton, California employer, and if you make it a habit of contacting your employees after hours, you may find yourself charged with overtime violations for failing to adequately track and compensate an employee for all of the work they do while away from work. Under the Fair Labor Standards Act (FLSA), an employer is required to pay all non-exempt employees for work performed, whether or not that work was requested, or merely "suffered or permitted." Under this rule, an employee must be compensated for any time that they spend performing work-related duties, even if they voluntarily check in early and check out late. Or even if they voluntarily answer a work-related text message, call, or email while off the clock. If the employee in question has put in a 40 hour work week in the office and continues to answer emails during the evening hours and on the weekend, that employee is owed overtime pay, which is one and half times their normal rate of pay.
Who is Eligible for Overtime Pay?Currently, salaried employees who earn more than $23,660 a year are exempt from overtime pay. This low threshold has saved countless employers billions of dollars over the years, especially as emailing and text messaging amongst upper management during the evenings and throughout the weekends has become the norm. However, as of December 1 of this year, the salary threshold at which white collar workers are exempt from overtime pay has been nearly doubled, to $47,476. This makes an additional 4.2 million salaried employees eligible for overtime pay (U.S. Department of Labor). This puts thousands of U.S. employers at risk for violating overtime laws.
Eliminate the RiskThere are steps that you can take to eliminate the risk for overtime violations as a California employer. For instance, you can implement a policy that addresses work performed outside of normal business hours by non-exempt employees. This policy could either request that all non-exempt employees refrain from engaging in any "off the clock work," such as fulfilling what may just be a small request made via email on a Thursday evening. No matter how small the request may seem, if it even takes five minutes of an employee's time, it should be recorded and therefore paid.
Secondly, the policy could prohibit non-exempt employees from performing any work-related duties outside of their normal work schedule entirely--including responding to an email, text message, or phone call from upper management.
Another measure you can take is to restrict access to company accounts outside of the workplace entirely. Company accounts can include email accounts, online management systems, Google Drive, and the like.