Exempt or nonexempt? That can be a tough question. With wage-and-hour litigation on the rise, wise employers are aware that the classification question is an important one, as well. The U.S. Department of Labor’s Wage and Hour Division (WHD), has announced a proposed rule that, if adopted, would have significant impact on the process employed by companies in determining whether or not an employee should be classified as exempt from the minimum wage and overtime requirements of the Fair Labor Standards Act.
The proposed rule would require employers to conduct a written classification analysis for each exempt employee. This analysis would have to be provided to the employee and a copy retained on file to be provided to the WHD in the event of an investigation. The same records would need to prepared and retained for any individual the employee classifies as an independent contractor–as opposed to an employee.
This proposed revision to the recordkeeping requirements of the FLSA is consistent with the DOL’s initiative to target employers who misclassify workers. It also seems to be indicative of a continued interest in initiatives that involve giving notice to employees of their various workplace rights. See You’ve Got Rights: NLRB’s Proposed Notice to Employees.