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Hot
Off The Press!
Every so often we receive calls
from dealers wanting to know if they need to pay for posters for
"Notice to Employees", (Nebraska Minimum Wage) or "Job Safety and
Health Poster", and other State and Federal Posters. These
posters are FREE. Please contact the Nebraska Department of Labor
at 402-471-2239 in Lincoln, or 402-595-3095 in Omaha.
New
Overtime Regulations
The U.S. Department of Labor has
adopted new regulations concerning the classification of employees for
purposes of overtime pay that were effective August 24, 2004. Employees
classified as “exempt” are not eligible for overtime pay. Employees
classified as “non-exempt” must be paid “overtime,” which is 1½
times their regular rate of pay for any time they work in excess of
forty hours in a single work week. Employers should review their
classification of employees in order to make certain that they are
properly classified under these new regulations. Highlights of the new
regulations as they affect dealers are as follows:
An
employee earning a salary of less than $23,660 per year ($455 per week)
is non-exempt, and therefore entitled to overtime in any week in which
that employee works more than 40 hours. There are two narrow exceptions
to this requirement for outside sales employees and certain
professionals.
Traditionally
“blue collar” workers are entitled to overtime pay.
An employee with a salary of more
than $100,000 per year is exempt from overtime pay as long as he
“customarily and regularly performs any one or more of the exempt
duties or responsibilities of an executive, administrative or
professional employee.”
The “computer” employee exemption
is available for employees whose primary duties consist of systems
analysis, programming or systems design, development, documentation,
analysis, creation, testing or modification, programming and design
related to machine operating systems, or a combination of those duties.
Computer professionals must also be paid on a salary basis of at least
$23,660 per year or on an hourly basis of at least $27.63.
The “outside sales” employee
exemption is still applicable. There is no minimum salary requirement
for outside sales employees.
The tests used to determine the
“executive,” “administrative,” and “professional” exemptions have been
modified for those employees earning a salary of between $23,660 and
$100,000 per year.
A common mistake employers make
is to assume that any employee who is “on salary” is exempt from being
paid overtime. Being paid on a salary basis is only one component. The
nature of the job is also considered. If the job duties do not meet one
of the exemptions, the employee is entitled to overtime pay when he has
worked more than forty hours in a week. The exemptions are discussed
briefly below:
Executive:
The employee’s primary duties must be to manage the business, or a
recognized division or section of the business; to regularly direct the
work of two or more full-time employees (or the equivalent, e.g. four
part-time employees); and to have the power to hire and fire employees
(or if his recommendations to hire and fire will be given significant
consideration).
Administrative:
The employee’s primary duties are to perform non-manual (office) work
that is directly related to the management or general business
operations of the employer; to have authority to bind the employer on
significant matters, generally involving significant amounts of money;
to exercise discretion and judgment with respect to matters of
significance.
Professional:
There are two types of professional exemptions. The first is when the
employee’s primary duties require knowledge and expertise gained by an
extensive course of specialized higher education. Usually an
undergraduate college degree is not sufficient to meet this exemption.
The second professional exemption is for certain artistic or creative
work, such as acting. Teachers are generally considered exempt, even if
they do not have advanced degrees.
Outside
Sales: The employee’s primary duty consists of making sales, or
obtaining sales orders, away from the
employer’s place of business, and who do not perform
other
functions for the employer more than 20% of this working time. Time
spent completing paperwork needed to complete the sales transactions is
considered to be time attributable to making outside sales.
The descriptions of the
exemptions provided in the regulations are not exact. They can provide
general guidance only. Each job must be analyzed on a case-by-case
basis. Some jobs may fall under more than one exemption. The Department
of Labor will generally allow a combining of exemptions to determine
that a job is exempt. However, because of the significant financial
exposure an employer may have if it misclassifies an employee as
exempt, in close cases, it is better to classify the employee as
non-exempt.
Because violations of the Fair
Labor Standards Act may result in awards of back-pay, liquidated
damages, attorney’s fees, as well as significant civil money penalties,
it is extremely important that employers review their pay policies to
be sure they are in compliance.
Blocked Person List
President
Bush, in Executive Order 13224, ordered the Office of Foreign Asset
Control (OFAC)
to make available to financial institutions a list of “Blocked Persons”,
known as “Specially
Designated Nationals” (SDN).
The Order, among other things, prohibits U.S. Citizens and
business entities from entering into “any transaction or dealing” with
individuals or entities who have been linked to terrorism and appear on
the list of “Blocked Persons.” The Executive Order
requires financial institutions (which includes car dealerships) to
verify their customers’ identity and check their customers’ names
against the blocked persons list. For
motor vehicle dealerships, the identifying information obtained from
customers would be essentially the same information currently obtained
by most motor vehicle dealerships for individual customers, including
the customer’s name, address, date of birth and identification numbers
(drivers license and social security number). Similarly,
motor vehicle dealerships generally have procedures in place to verify
the identity of customers within a reasonable period of time.
Forms of identity verification utilized by motor vehicle
dealerships include examining and making copies of customer driver
licenses and obtaining credit reports. Dealers
should determine whether these policies have been reduced to writing in
a procedures manual. You wouldn’t want one of
your vehicles to be identified as a terrorist’s bomb transport.
To access the blocked
persons list on
the Internet, go to the above website and click on the SDN list.
The SDN list is also published periodically in the Federal
Register, a copy of which is available in most public libraries.
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