Why Outsource HR?

Exempt or Non-Exempt?

Proper employee classification now, may mean avoiding expense in the future.

There are three main categories of employees that are generally not entitled to overtime: administrative, professional and executive. These categories are typically known as exempt, but there may be some blurring of the lines.

Administrative classification require that those employees have decision-making authority and may be involved with contract negotiations. The professional classification are for those employees with advanced degrees or specific training, but only if they are using those skills while on the job. A lawyer driving a forklift should not be classified as exempt. The executive exemption usually is used for management running the company or a particular business unit. These are all fine lines and mis-classifying employees may cost you.

Department of Labor audits usually come on the heals of an employee complaint. If you have misclassified the employee, you may owe back pay for the entire term of that person's employment. In 2006, the Department of Labor collected over $170 million in back wages. In addition to back pay you most likely will have to pay attorney and consulting fees.

Be careful of docking an employee's pay for coming in late, missing a workday or lost company property. When you dock pay you are linking it to the quality of their work. Exempt employees are "guaranteed" regular pay.

If you have questions about proper employee classification, speak with an attorney or business consultant that deals specifically with employment matters; it may help avoid trouble in the future.

180-Day Discrimination Rule

The Supreme Court overturned an Alabama Federal Court decision awarding a woman $360,000 in damages for her discrimination suit because she didn't issue the complaint within 180 of the "intentional discrimination" beginning. Although Lilly Ledbetter's salary initially matched that of her male colleagues, over time she received smaller raises. And at the time of the suit, Ledbetter was making 40 percent less than the lowest-paid man, even after 20 years of employment with Goodyear Tires. via Entrepreneur

What Is "At-Will" Employment?

I have a small company and am planning on hiring some employees. How can I make sure that I am able to terminate them if they do not work out or I no longer need them?

Make clear to your employees that their relationship is an "at will employment" relationship. That means that either the employer or the employee can terminate the relationship at any time for any reason, or for no reason. (However, various laws may restrict your ability to fire someone for wrongful reasons, such as reasons related to race or sex.)

When you first hire an employee, make sure that he or she signs an offer letter indicating that he understands and agrees to the fact that he is an at will employee. That lessens the risk of a problem later on. If you have an employee handbook, make sure the employee handbook spells out the at will nature of the relationship.