Keeping Up on Time and Wage Compliance: Easier than it Sounds

Last week while attending the KronosWorks event in Las Vegas, I heard quite a bit about proposed changes to the Fair Labor and Standards Act (FLSA). This was of special interest to attendees of KronosWorks, who are primarily professionals who deal with changing regulations to time and wage regulations.

Coincidentally, two Second Circuit Court of Appeals rulings came to light during the week – one (Three D, LLC v. NLRB), was on whether “liking” a disparaging or negative comment was acceptable grounds for termination (nope). The other (Davis v. New York City Dep’t of Educ.) was whether discretionary bonus payouts could be considered an “adverse employment action” (yep).

Neither of these cases has a direct effect on time and wage compliance issues, but both are examples of how quickly labor laws can change by way of precedent (as opposed to wholly new legislation). Especially for small and mid-sized businesses, HR professionals have to make very quick decisions based on limited data about complex, often legal-oriented, topics.

In Brandon Hall Group’s 2015 Wage and Labor Law Compliance Survey, there was a question asking respondents about how often they checked to see if their pay policies were still in compliance.

Frequency of Review of Laws and Regulations that Affect How Employees are Paid

Source: 2015 Brandon Hall Group Wage and Compliance Study (n-255)
Source: 2015 Brandon Hall Group Wage and Compliance Study (n-255)

As you can see, 57% of organizations surveyed review new regulations twice a year or less, which might be acceptable in terms of dealing with completely new regulations, especially those as high profile as FLSA, but leaves many organizations quite unprepared to deal with more recent precedents involving common, everyday decisions.

This is not meant to be fearmongering, but rather to note that it is worth taking the time to either set up regular meetings with someone from your legal team to stay apprised of relevant cases, or in the case of smaller companies, to set aside time to review legal precedents through research (on your own or curated) or through online message boards or forums.

It does take some time to get acquainted with terminology and figure out what is relevant news, but after a few weeks it takes no longer than 10 to 15 minutes to review all the significant rulings of that week. Of course, the real work comes about when it’s time to actually change the policy and affect change, but that’s a discussion for another time.

Cliff Stevenson, Principal Analyst, Workforce Management, Brandon Hall Group

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