Benefits & Compensation Questions of the Week

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Exemption Status of Inside Sales

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Question:

How do you handle the exemption status for Inside Sales employees?

Answer:

According to the Fair Labor Standards Act (FLSA), Outside Sales employees are exempt while Inside Sales employees are non-exempt.  (http://www.flsa.com/coverage.html).

To help define inside versus outside sales roles, we researched the Department of Labor (DOL) website. The DOL defines outside sales employees as those that sell their employer’s products, services, or facilities to customers away from their employer’s place(s) of business, in general, either at the customer’s place of business or by selling door-to-door at the customer’s home. Sales made from the employer’s location (inside sales) do not qualify as outside sales. Similarly, work done by mail, telephone or the Internet do not qualify as outside sales unless such activities are in connection with sales made by personal contact. Some employees performing inside sales work in certain retail establishments may be exempt from the overtime pay protections under FLSA section 7(i) – http://www.dol.gov/elaws/esa/flsa/overtime/s1.htm.

Strategic HR has the answers to all of your tough Benefits and Compensation related questions. Whether you need an audit of your exemption statuses or a job analysis of your positions, Strategic HR can do the job. Please visit our Benefits & Compensation page for more information.

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Paying Employees for Work-Related Activities

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Question:

The other day I asked an employee to drop off some paperwork at a client’s on their way to lunch – it was on the way. When the employee turned in their time for the week they included that drive time to the client’s. Do I need to pay employees for their time when they are driving past the establishment anyway?

Answer:

Yes you do. Any time that the employee spends doing work-related activity should be counted as hours worked. According to the Department of Labor’s FLSA Hours Worked Advisor, hours worked includes all time from the work location to the place where the employee finishes their last work-related duty. That means you pay for the employee’s time from your office up to the drop off of the paperwork. The time spent going from the client’s location to lunch is not paid (just as you wouldn’t pay them to drive from work to lunch and back).

Are you hesitant when it comes to navigating FLSA and other federally mandated rules and regulations? Strategic HR understands your uncertainty. Ask us for assistance for any of your benefits and compensation needs. Please visit our Benefits & Compensation page for more information on any of these services.

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Handling Employee Pay when Bad Weather Hits

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Question:

With all the bad weather we have been having, how do I handle paying employees when our facilities are closed, or employees just don’t make it in because of the weather?

Answer:

No matter where you live, inclement weather is bound to affect your workforce at some point in time. How you handle it depends on whether employees are exempt or non-exempt.

For exempt employees, the Fair Labor Standards Act mandates that you cannot reduce the pay of an exempt employee for less than a full day. If the employee is willing and able to work, but the organization is closed, the Department of Labor has ruled that you must pay exempt employees for time missed when it is less than a week. You can however require an employee to use any available paid time off (i.e. vacation time), even if that remaining time has already been scheduled and approved for another time. But keep in mind the impact of doing so on employee morale. Even if an employee has no remaining PTO, the Department of Labor has clearly established that exempt employees must be paid their regular salary for time missed, when it is less than a week, due to facility closure. In the event you are open for business but an exempt employee does not report for work due to inclement weather, the FLSA does allow you do deduct a full day’s pay. Again, you may require them to use paid time off. In order to avoid the inevitable negative feelings on the part of the employee, many employers will just pay the day or allow the employee to work from home.

For non-exempt employees, there is no requirement to pay employees for time they have not actually worked. You might want to consider requiring or allowing employees to use PTO (to make up for lost wages) or allowing them to make up the time within the same work week.

The important thing is to have thought your policy through before the weather hits. In addition to compensation, determine how you will you communicate to your employees that the organization is closed due to bad weather or other misfortunes. By establishing a plan before the weather hits, you can minimize the disruption and uncertainty for employees.

For further guidance on the Fair Labor Standards Act, visit www.dol.gov.

It’s tough having to navigate the ever-changing FLSA laws and other federally mandated rules and regulations. Strategic HR can help. Ask us for assistance with any of your benefits and compensation needs. Please visit our Benefits & Compensation page for more information on any of these services.