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FLSA Compliance Process


  1. Review the new regulations at 29 CFR 541, as they appeared in the Federal Register on April 23, 2004. White papers, summaries, and outlines of the recent changes are helpful, but it is important to reference the actual regulations to ensure your company is in compliance. [view the regulations]

  2. Provide training to other HR professionals, managers, and supervisors who will be assisting with the internal FLSA audit. It is important for anyone participating in the FLSA classification of employees, to fully understand the regulatory changes. [view a presentation template]

  3. Assess the salary levels of employees currently classified as exempt:

    1. Identify those exempt employees currently earning less than $455 USD/week ($23,660 USD annually) and decide whether their salary will be increased or they will be reclassified as nonexempt.

    2. Assess the duties of those exempt employees currently earning between $23,660 USD and $100,000 USD to confirm they are correctly classified as exempt under the new duties tests. [view example worksheets]

    3. Verify that any employees currently earning over $100,000 USD meet at least one of the requirements of the new duties test. [view example worksheets]

    4. Confirm that outside sales and computer professionals meet the new respective duties tests. [view example worksheets]

  4. Make any necessary classification changes resulting from this analysis by Aug. 23, 2004.

  5. Communicate those changes to the affected employees, at a minimum. You'll want to be sensitive to the impact on affected employees (benefit eligibility, perceived status, etc.) resulting from the change. You may also choose to issue a general communication about the regulatory changes offering employees a contact should they have any questions (which can be done at any time). [view example communications]

  6. Review organizational pay practices to ensure that all nonexempt employees are properly paid for all time worked including overtime, and update those policies and procedures as necessary.

  7. Modify your existing policy or implement a new policy to include the new safe harbor for improper deductions provision.

  8. Initiate training for any managers and supervisors not involved in the compliance audit process to educate them about their role in remaining FLSA compliant. [view a presentation template]

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