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Exemption Checkup: Tips on Finding and Fixing Pay Practice Problems in 2012 (03/29/12)

Employers must properly classify workers under the Fair Labor
Standards Act, especially given the potential for expensive
class-action lawsuits. The U.S. Department of Labor has beefed up
its FLSA enforcement with the P3 Initiative, which calls on
employers covered by the Wage and Hour Division to create written
plans for identifying wage and hour violations (plan), develop an
implementation process (prevent), and test the process for
compliance (protect). The DOL is expected to propose a rule
forcing covered employers to inform exempt employees of their
status and conduct classification analyses on these exempt

Experts stress the need for proper worker classification, as
“employers” are jointly liable for FLSA damages. Given
that the definition of “employer” is “any person
acting directly or indirectly in the interest of an employer in
relation to an employee,” human resource professionals and
others could be held liable. However, courts typically take into
account an individual’s financial control over the work force
and role in creating pay policies and classifying workers when
determining personal liability.