Presenting

and local governments have also been tightening regulations and increasing inspections to ensure that exempt personnel are really exercising management-level decision-making. Retailers often run afoul of the law by exempting some upper-level personnel who do not exercise suffi cient management duties. "Many times, assistant store managers classifi ed as exempt do not really qualify," says Witte. "Maybe they have keys to open and close the store, and maybe they do some things with the registers, but otherwise they are working the fl oor like everyone else and do not have suffi cient authority or enough qualifi able duties. is problem has been on the radar of the Department of Labor for some time. Employees have fi led complaints, and there have been class-action lawsuits." Misclassifi cations can be costly for employers, especially when an exempt individual's salary has steadily increased over time. Should a DOL inspector issue a violation, the employee's elevated salary is fi rst broken down into an hourly rate, which is then utilized as the basis for calculating past overtime and penalties. "Sometimes an employer will react to a steadily rising paycheck by saying something like, ' is person has been starting to work too much overtime; let's just make [him/her] salaried,'" says Bob McKenzie, president of McKenzieHR, a payroll and HR services company in Brunswick, Ga. " at's not allowable unless the individual truly qualifi es for exemption." e lesson is clear : Employers should assume non-exemption when classifi cation is ambiguous. " e law is deferential to workers in wage- and-hour actions," says Heerde. " e consequences can be costly for an employer who does not have suffi cient records to refute an employee's wage-and- hour claims before an administrative agency or court." OFF THE CLOCK While misclassifi cation is the most common error in wage-and- hour law, employers can also be penalized for allowing work time to go unrecorded. "Employees often fail to report off -the-clock hours," Witte notes. "Maybe they work through their lunch hours, or they come in early or stay late and don't record it because they're afraid of getting into trouble with their boss for working overtime. is is an area that the Department of Labor continually receives complaints about." Retailers seem especially vulnerable to the temptation to let things slide. "Sometimes store personnel will work off the clock for a few minutes—either at the workplace or at home, maybe checking their emails or making a phone call or two—and the retailer thinks that's OK," says Vicki M. Lambert, CPP, president and academic director of ePayrollAdvisor.com. "One retailer got into trouble by having employees drop off packages to customers on their way home from work but failed to pay the workers for the delivery time. [Listening, fl orists?] e fact is that having employees work off the clock is not OK, even if it's for only a few minutes." Retailers can also suff er for the often-uncertain level of need for employee labor. " Very often, retail workers will come to the stores in response to a store manager's order but are then told to stand by because they are not needed for a while," says Witte. Retailers must pay for such so-called "engaged to wait" time. While one might suspect that some misguided employers overlook or even encourage off -the-clock labor, the fact is that workers can also be to blame, says Lambert. "Sometimes, employees will get enthusiastic and think, 'Well, I'll just do this job off the clock really quick, and then my boss will be really happy.' And they end up getting the employer in trouble." Other times, employers will allow record-keeping to fall through the cracks. "Problems can arise when an hourly recording system is not suffi ciently detailed or not contemporaneous," says Heerde. "Later, when an issue arises, the employer has to track down evidence of work hours by sorting through old emails and other records to prove an employee was paid correctly."

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