You have most likely received a mountain of information from law firms and consulting firms desiring to assist your organization with the new U.S. Department of Labor (DOL) FairPay Regulations that took affect August 23, 2004.

Although this federal regulatory update was designed to make things easier and more understandable for employers while ensuring that they pay their employees correctly, it has caused much confusion for many employers.

In this update, rather than provide you with the same information that you have received in multiple forms for the past several months, we will provide you with the following DOL FairPay Implementation Checklist of actionable items to be used while determining what your organization needs to do to adhere to these updated regulations.

DOL FairPay Implementation Checklist

·        Review all of your current position descriptions and ensure that they include the current essential duties of the position.

·        Use the updated position descriptions to determine which exemption, if any, the position qualifies under.

·        Determine necessary pay adjustments and the financial impact to the organization of those adjustments. 

·        Ensure that individuals whose status has changed to non-exempt are properly recording their overtime and are being paid for all hours worked.

·        Determine all highly compensated individuals (at least $100,000 per year) and determine their exemption status based on the newly revised federal duties test.

·        Completely remove the “preferences” of supervisors, managers and executives when determining whether an employee should be considered exempt or non-exempt.  Utilize job duties and responsibilities only when determining an employee’s pay status.

·        Ensure that any increased labor costs are reflected in the annual budgeting process and factored into operating costs.

·        Ensure that managers understand the financial impact of overtime pay and ensure that they are properly managing this expense.

·        Adjust company policies and procedures to reflect the company’s ability to deduct a full day’s pay from exempt employees for absences and infractions as indicated under the new regulations.

·        Communicate all changes to management and employees.

Although the above items are not extremely difficult to implement, they do take time and resources, which are often at a premium.  The important thing is that you begin now to address these items and use this implementation period to ensure that your organization is compliant. 

Additionally, it is critical that you communicate the reasons for these changes to your employees in such a manner as to not bring undesired focus to your organization regarding how individuals may have been paid in the past.