AUBURN — Attorney Michael Malloy joked Thursday in front of a crowded chamber breakfast that he’d been tempted to “bring a bunch of time cards and light them on fire” to add dramatic flair to his talk.
Yes, the new federal overtime rules are dry, he said.
“They’re kind of regulatory wormholes that lawyers love to geek out about, but which really are a sure-fire cure for insomnia for the rest of you in this room,” Malloy told 200-plus Lewiston Auburn Metropolitan Chamber of Commerce members at the Hilton Garden Inn.
The reason to pay attention anyway: A misstep could cost a company millions.
“You do need to know about this because this is something that’s really going to be affecting every single employer in Maine, not just for-profit employers but also nonprofit,” he said.
New U.S. Department of Labor overtime rules take effect Dec. 1, resetting the rules for who gets paid overtime and when.
In essence, the law applies to workers who:
* Are salaried employees (not paid an hourly wage);
* Work more than 40 hours a week;
* Are not paid more than $47,476 a year.
“If your (non-hourly) employee, your white-collar worker, does not make at least $47,476 a year, then they’re not going to be exempt from the overtime requirements, end of story,” Malloy said. “The big change is that (the federal minimum wage for a salaried employee) has gone up from $23,660 a year, or $455 a week, more than doubling the salary level to get into this exemption, and that’s what’s really raising flags.”
Malloy, who specializes in business law and recently opened his own practice locally, The Malloy Firm, encouraged employers to draw up lists of salaried workers earning less than $47,476.
Then look at their job descriptions and compare their duties against the law. For lingering questions on whether someone is exempt, consult a human resources specialist, an attorney or a company’s accountant.
It’s important to get that classification right, Malloy said. Employees who haven’t been paid overtime when they should have been can file suit to recover up to six years of back wages, “plus they can then double those wages that they’re owed as punitive damages, plus their attorney’s fees.”
“For a reasonably sized employer, this can quickly get into millions of dollars,” he said. “This isn’t something that really comes up when everything is fine and you have employees who are doing great. This is what happens when ‘it’ hits the proverbial fan and a current or former employee goes to a plantiff’s attorney and wants to get back at you or feels that they’ve been wronged.”
Malloy has a chamber workshop planned for Sept. 22 with a Q&A to help companies get into specifics.
There are options other than increasing salaries, Malloy said. For example, schedule employees’ time and “manage their failure to adhere to set hours through employee discipline, if you need to.”
“Really, the buck stops with the employer here,” he said. “Do not put this off. You don’t want to be sitting here over Thanksgiving weekend scrutinizing your payroll ledger saying, ‘How am I going to afford all my employees next week?’ There are ways you can structure your business and make some decisions to accommodate this new change, but you’ve got to be proactive about it.”
kskelton@sunjournal.com
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