New Labor Law Rules and Regulations:

Hello Everyone! This is from the NCCA newsletter. Check it out! Time to look at and update our employee policy.

August 2004 Quick Action Required On August 23, 2004 new rules from the Department of Labor addressing exempt and nonexempt employees will go into effect. Be sure that you are prepared for these changes so that you will be in compliance with the law. Exempt Employees are those who meet certain criteria to be exempt from the minimum wage and overtime laws. To be exempt an employee must meet the criteria for Executive, Administrative, or Professional employees.

The Executive Exemption requires that the employee

· Is compensated on a salary basis at a rate not less than $455 per week

· Has as her primary duty the management of the enterprise or a department or subdivision of the enterprise

· Customarily and regularly directs the work of at least two or more other full-time employees or their equivalent, AND

· Has the authority to hire or fire other employees, or the employees suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.

The Administrative Exemption requires that the employee
Be compensated on a salary or fee basis at a rate not less than $455 per week AND
Has as her primary duty the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers and includes the exercise of discretion and independent judgment with respect to matters of significance.

The Professional Exemption requires that the employee be a learned professional and
Be compensated on a salary or fee basis at the rate of not less than $455 per week AND
Has as her primary duty the performance of work requiring advanced knowledge, defined as work which is predominately intellectual in character and which includes work requiring the consistent exercise of discretion and judgment. The advanced knowledge must be in a field of science or learning and must be customarily acquired by a prolonged course of specialized intellectual instruction.

What should you be doing to prepare for these changes?

Our good friend, David Miller, at Baker & Daniel's law firm suggests you
Identify any exempt employees who earn less than $23,660 annually. For those employees, you must decide whether to raise their salary to retain exempt status or begin paying them overtime based on their current salary (converted to an hourly rate) or on a reduced hourly rate

Conduct a comprehensive analysis of all jobs and revise job descriptions. You need to determine which positions qualify for exempt status under the new regulations. Job descriptions should accurately reflect the work performed and the qualifications for the positions to help establish exempt status under the applicable duties test.

Review and revise your disciplinary policy and work rules to ensure they apply to all employees, including salaried exempt employees (if suspension is a form of discipline you would like to have available for salaried employees). An exempt employee may now be suspended for violating a written work rule without jeopardizing their exempt status.

Implement a “no deduction” policy with a complaint mechanism.

This is essential to take advantage of the new safe harbor protections for improper deductions from the salaries of exempt employees. This policy and procedure should be included in your employee handbook.
Be sure to notify employees of these changes and their impact.