5 Ways to Leverage Technology for Overtime Compliance

By Adam S. Forman and Jeffrey H. Ruzal
5 Ways to Leverage Technology for Overtime Compliance


On Sept. 24, 2019, the U.S. Department of Labor (DOL) announced a final rule to the Fair Labor Standards Act. This rule is a new iteration of an earlier, unsuccessful 2016 rule that would have raised the minimum salary threshold from $23,660 to $47,476 per year to qualify for the executive, administrative and professional exemptions from overtime. The U.S. District Court for the Eastern District of Texas blocked the 2016 rule. Although the DOL initially appealed that decision, in September 2017, the 5th Circuit dismissed the DOL's appeal at the department's request.

The new 2019 final rule, like its unsuccessful predecessor, will still significantly increase the number of employees eligible for overtime pay. The rule will increase the salary threshold to $35,568. The new rule also will allow employers to include "certain nondiscretionary bonuses and incentive payments" up to 10 percent of the new salary threshold. 

Further, the new rule will raise the total amount of annual compensation requirement for highly compensated employees, who are subject to a relaxed duties test, from $100,000 to $107,432. The new rule will take effect on Jan. 1, 2020. 

Many employers will have to decide whether to raise the salaries of their currently exempt workforce or reclassify them as nonexempt workers and pay them overtime for all hours worked over 40 in a workweek. Some employers will ultimately determine that increasing the salaries of some of their previously exempt employees to comply with the new overtime rule is not economically feasible. These businesses will be required to account for newly nonexempt employees' work time.

Implementing written policies and providing training to employees converted from exempt to nonexempt status are good starting places. For many employees, the conversion will represent a complete culture change and will present a difficult transition. Just because such employees are no longer classified as exempt does not mean that they will stop thinking—or, more importantly, acting—like exempt employees.

Employers can help workers deal with this transition, while simultaneously minimizing their risk of liability for wage and hour claims, by leveraging innovative and user-friendly technologies.

To that end, employers should consider the following five ways that they may be able to use existing or new low-cost technologies to assist them in maintaining wage and hour compliance:

  1. Remote access. Many employers provide their employees with remote access to company resources through a virtual private network (VPN) (extending a private network across the Internet) or other similar solutions, such as Citrix. Using employer-provided login credentials, employees have 24/7 access to company resources. Employers offering such remote access should consider creating a security group for nonexempt employees and a rule prohibiting those in the group from accessing company resources and networks outside employer-defined time periods.

  2. Monitoring and auditing software. It will likely take time for newly converted nonexempt employees to modify their habits of frequently checking and responding to e-mails and otherwise working off the clock. Employers can assist in this transition by implementing monitoring and auditing software that records all activity on computers on or off the network. Among other things, this software allows an employer to see every employee e-mail sent and received on all major e-mail programs, including webmail, as well as the subject, recipients, and date and time. It also shows an employer which programs an employee is using, when and for how long. Employers wishing to be more proactive can set up the software to block an employee from using any program on the network outside employer-defined working hours.

  3. Time-keeping software. Newly reclassified employees will be required to track, record and report working time in a manner that they have not previously done. Fortunately, there are dozens of software solutions, both for desktops and mobile devices, to help newly nonexempt employees keep track of and report their time. Employers that elect to use biometric time-keeping software should be mindful of statutory and common-law obligations required for such technologies.

  4. Electronic disclaimers and messages. Employers should consider creating a customized splash screen that appears when a nonexempt employee logs in to the company's system outside employer-defined working hours. The screen would require the employee to click a box affirming that he or she either 1) is not working outside normal working hours or 2) received prior approval to work outside normal working hours and will accurately report all such time worked. Related to this, an employer could, with a bit of scripting, set up a pop-up message that appears on a nonexempt employee's screen, based on his or her employment status and the time of day, with a notification that the end of his or her shift is approaching. Employers are required to compensate nonexempt employees for the work they actually performed, even if such work is unauthorized

  5. Eliminate technologies. Perhaps the safest way to ensure that nonexempt employees are not using employer-provided equipment to work off the clock is to eliminate availability to all such technologies. Given work demands and an organization's culture, this option may not be practicable, but in the right circumstances, it might make sense.

Adam S. Forman is an attorney with Epstein Becker Green in Detroit and Chicago. Jeffrey H. Ruzal is an attorney with Epstein Becker Green in New York City. Anastasia A. Regne, a law clerk (admission pending) with Epstein Becker Green in New York City, assisted with this article. 



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