Employment law can be confusing for both the employee and the employer. Employees need to know that their rights are and what they’re entitled to—and employers need to know whether they are in violation of any of those rights. Do you know the ins and outs of vacation and comp time, overtime, and vacation time?
- Compensable Time. Employees need to be compensated for all time spent on duties required for performing their jobs. This includes changing in and out of a uniform or personal protective equipment, performing a stock inventory, having to set up or clean their work area, or attending meetings outside of regular work hours. They are also entitled to compensation for working through a lunch break.
- Unpaid Vacation Time. If you provide paid vacation, that time becomes part of the employee's total compensation. So if an employee is fired or quits, they are still entitled to payment for vacation time accrued.
- "Use It or Lose It" Vacation Time. Maybe you have a "use it or lose it" policy, where employees who don't use their accumulated vacation by the end of the year will lose that time all together. Just make sure that such a policy is legal in your state—they’re illegal in some.
- Exemptions. You know that exempt employees are not entitled to receive overtime pay, but remember that exemptions have nothing to do with title, job description, or salary versus hourly wage. Salary level and job duties are the determining factors for exempt classification.
- Overtime Pay. Are you calculating overtime pay properly? Are you paying it promptly? Under the Fair Labor Standards Act, overtime pay rules are based on a 40-hour workweek and all work over 40 hours in a workweek must be paid at a rate of one and one-half times the employee's regular hourly rate. You can pay your non-exempt employees overtime on a weekly, biweekly, semimonthly or monthly basis, but you must always calculate it based on the Monday through Friday workweek.
- Comp Time vs. Overtime. Maybe sometimes you offer compensatory time (comp time) or paid time off, instead of paying overtime. This can be helpful when, instead of paying large amounts of overtime during a busy season, you allow your employees to accrue comp time, to be used when work slows down. Just remember that comp time must always be paid at the same rate as overtime wages: 150%.
One of the easiest ways to make sure your company is always in compliance where these things are concerned is to sign on with Complete Payroll. We can manage your tax services, direct deposit, paperless payroll, time off accruals and more! Call us to see what kind of customized plan we can create for you.