As our country opens up this summer, companies continue to face unprecedented issues specific to COVID. That’s right, a year later and employers are still dealing with the fallout. You figured out how to keep everyone safe and pivot your offering; you can overcome this hurdle, too. What’s most important is mitigating your exposure to wage and hour issues that could spark lawsuits.
Compensating non-exempt employees working remotely
Whether onsite or remote, regular hours or overtime, exempt employees are paid a salary for any work done. Non-exempt employees are paid by the hour, which can be complicated for remote work situations. You need to communicate policies and ensure your non-exempt employees understand their importance.
- Compensable work time – Employees need to track when they start work, take breaks and end work. You can also develop an agreed upon schedule. This ensures they’re available when you need them and reduces non-work distractions that can pull focus during the day. Conversely, dedicated employees may log on early or check email late at night. All that time is compensable, even if it’s outside of their normal schedule.
- Overtime – Employees need to know what the rules are surrounding overtime. They may be up against an important deadline and need extra time to complete it on time. Do they need to get that time approved first? Do employees have a certain number of overtime hours allowed before securing approval? It’s important to have these policies in place so you aren’t surprised by increased overhead.
Challenges in determining compensable time
As more employees return to the office, the process for getting to their workspace could be completely different. With elevator capacity limitations, temperature and symptom screening, increased hand washing requirements, you could be required to pay employees for this additional waiting time. If so, what’s a practical way to measure this time? It varies by jurisdiction, so be sure to check local requirements.
Requirements for a multi-state workforce
With decreased emphasis for on-site talent, some employers have instituted a tiered salary structure based on the cost of living for where the person lives. Even before the pandemic, this was a growing trend: hiring out-of-state employees or allowing employees to work from any location. Working from a secluded cabin or beach has often been glamourized in the media, but what you don’t see are the challenges that come with it. If you want to offer that kind of flexibility, just make sure you understand the administrative impact and legal considerations of having a multi-state workforce. Across state lines, there are different laws, tax requirements and municipal ordinances.
Reimbursing employees for business expenses
Certainly, there are necessary expenses involved with working from home. As an employer, how do you decide what should be reimbursed? Some businesses have employees that are resistant to returning to the office citing COVID concerns. Do employers have to reimburse expenses if they’ve chosen to stay home versus returning to the office? These can be difficult decisions. Illinois enacted a law that provides useful guidelines surrounding reasonable expenses.
Avoiding misclassification
During COVID, work duties evolved. You must review how each position changed and compare it against how that role is classified. For instance, your outside sales rep was classified exempt, because most of their work was visiting prospective clients away from office headquarters. The FLSA’s outside sales exemption no longer applies if in-person meetings were cancelled over the past 12 months and they’ve been working from home. Since their home is now their place of business, you may need to reclassify them as non-exempt, and they would be entitled to overtime pay. If you fail to catch this and don’t pay required overtime, you could be liable for overtime compensation, or a misclassification claim by that employee.
MidwestHR is a top ranked CPEO in Illinois (certified professional employer organization). For over 20 years clients have counted on our team of experts to manage all or part of their HR functions including payroll and tax administration, benefits management, workers’ compensation, risk management and more. During the pandemic, our top priority has been helping clients navigate these uncharted times, including updates on the latest legislation, recommended policy updates and other best practices to keep teams engaged. Give us a call at 630-468-9286 to learn more.
