This week the DOL announced changes to the white collar overtime exemptions that take effect December 1, 2016. Every employment lawyer with a newsletter, blog or soapbox has written some summary of the new regulations. And while the regulations only effect the executive, administrative, professional and high compensated exemptions, Daniel Schwartz, a Connecticut employment lawyer with a highly informative blog, notes that these regulations provide a unique opportunity for employers to correct other positions where it may have potential exposure for misclassified workers.
As Dan wrote last night:
Too often, employers who discover that they have misclassified employees believe that they are in a conundrum. Keep their head down and hope no one notices, or properly classify the employee and keep their fingers crossed that they don’t get sued for back pay. Neither option is a great one for employers who need to get into compliance. . .
But here is where the opportunity comes in: As I highlighted at the start, the new overtime rule has received unprecedented amounts of publicity in the workplace. No doubt most of your employees have now heard something about it. So, some won’t be surprised if they are notified that things are changing for their position as a result of the new rule.
While the rule doesn’t provide amnesty for employers who make such changes, the new rule does remove some of the suspicions employees may have about the changes — even when those changes are perfectly legal. Employees may be more understanding. Employers can explain truthfully that the new rule has required them to review the classification of all of its employees and the changes are as a result of the rule.
Some employers are aware that they have some positions that are likely misclassified either as exempt or workers as independent contractors. One reason employers don’t reclassify these positions is the lack of any safe harbor provision from liquidated damages or attorney’s fees for voluntary changes in classification and the prospect that such changes will raise a red flag triggering a wage and hour lawsuit.
The new DOL regulations may allow an employer the “cover” to correct these misclassified areas without drawing as much scrutiny as it would in the absence of the regulatory change and the significant public awareness that changes were made. Of course, communications to employees about changes in classification should always truthful.
If your company has positions that might be misclassified, consult the company’s labor and employment counsel to determine the publicity surrounding the new overtime regulations makes it the right time to make changes and get compliant.
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