In today’s environment, it is critical that all organizations properly classify their position titles and pay their employees correctly. The number of FLSA and State Wage-Hour Law cases and the settlement cost of non-compliance with regard to these two items are increasing significantly. Classifying your organization’s position titles means that you have accurate job descriptions and that your exempt-level positions meet the three-part exemption guidelines or the type of positions meet the specialty exemptions provided by the Department of Labor. Your job descriptions should be written accurately and should reflect what each employee is actually doing in their respective position. Paying the employees correctly means that the position has been classified correctly and the employee pay level and amount is consistent with classification of the position.
There are several reasons for taking the necessary steps to accomplish these two important items. These reasons include:
- Preventing compliance issues
- Identifying compliance issues before litigation and being able to fix issues consistent with normal business operations
- Maintaining accurate records creates good faith defenses
- Knowing with confidence your employees are being paid correctly.
A few years back, our group attended a training program by Tammy McCutchen with the law firm Littler Mendelson. She presented a seven-step program for Wage-Hour Compliance. The seven-steps are as follows:
- Policies & Procedures
- Implementing Change
- Compliant Process
- Maintaining Compliance
Our firm has assisted several organizations around the country with several parts of the seven-step compliance program using our DBCompensation software. The software allows you to build your job descriptions using an ADA compliant and electronic template, thus ending up with comprehensive, consistent and defensible job descriptions. Embedded in the job description template is our 15-factor copyrighted OFCCP-reviewed job rating system which establishes a point value for each job description as well as provides additional insight to a position’s classification of non-exempt and exempt. Once the job descriptions and job ratings have been developed, the organization’s employee data can be imported in, as well as 12 outside market resources that can be inputted into the program. All of this information is used to create several output reports which identify any internal pay inequities as well as determine where the organization is versus market as a whole and for each employee. DBSquared has the necessary tools to assist organizations with the proper classification of its position titles and employees’ fair pay levels and is helping to maintain compliance in these two critical areas.