Wage & Hour Laws: 4 Common Misconceptions

Wage & Hour Laws: 4 Common Misconceptions

Last week in our webinar with Steve Roppolo from Fisher Phillips and Kynzie Sims from Compli, we talked about the upcoming changes to the Fair Labor Standards Act’s Overtime Rule. This week, we’re diving a little deeper into the Wage & Hour Laws to understand a few of the common misconceptions.

MISCONCEPTION #1:

“Managers” are automatically exempt from overtime. This is NOT TRUE. There is no exemption from overtime for managers. In order for a manager to be exempt, the individual must fit exactly into a specific exemption.

MISCONCEPTION #2:

If an employee is paid a salary, he is exempt from overtime. This is NOT TRUE. While many exempt employees are paid a salary, that is not what makes them exempt. There is no automatic exemption from overtime for an employee who is simply paid a salary.  Only if an employee fits into one of the recognized exemptions, will they be exempt from overtime. However, if the employee does not exactly fit into one of the exemptions, he or she is entitled to overtime if the individual works more than 40 hours in a week.

MISCONCEPTION #3:

If an employee agrees to be paid in a certain manner, he is legally bound by this agreement and cannot later sue for additional wages. This is NOT TRUE. The law does not permit an employee to waive his or her right to minimum wage or overtime. So the fact that a non-exempt employee agreed to accept a large salary with no overtime pay and worked happily under that pay plan for years, would not prevent him from suing for unpaid overtime going back three years.

MISCONCEPTION #4:

Employees who are paid on a salary or commission basis do not need to keep records of their hours, because they are not paid “by the hour.”  This is NOT TRUE.  Every employee must maintain an accurate record of their hours worked unless the employee is exempt from the time-keeping provisions. This applies to all employees regardless of how they are paid. In addition, in some states, ALL employees – from General Manager on down – are required by law to keep a daily and weekly time record.

Fully understanding the law, including the common misconceptions, makes it much easier to be sure you are in compliance.

Where did we find these? In Compligo, of course.

The misconceptions above are an excerpt from a policy provided by one of our partners, Fisher & Philips. We work with them and other industry experts to make sure we are providing accurate and current information, and we manage that information in an online Compliance Management System. One of the benefits of using a Compliance Management System is that it houses all the policies and guidelines you need to be aware of for your industry so you don’t have to go hunting down information; it is simply at your fingertips.

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Brett Safford

Brett is a previous member of Compli’s Customer Success team, where she helped clients get the most out of their platform and achieve their unique goals. Brett's love for fabric and quilting means her family suffers from an overabundance of blankets. In the evenings Brett can be found cooking in the kitchen with a glass of red wine and Ella Fitzgerald on the record player.

→ Brett Safford

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