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Event Management

Notes

Notes Labour laws
There is not enough space here to detail all labor laws and their implications, but we can
look at a few of the more common issues affecting employees and contractors in our
industry. It is necessary to emphasize, however, that the following comments do not
constitute, and are not intended to be, legal advice. Labor laws vary from state to state, and
all companies should seek professional advice regarding compliance with the laws of
each state in which they operate. Rules are also open to interpretation, and there are many
departments and agencies that have jurisdiction on overlapping issues.

9.10 Issues relating to staff

There are five major categories that managers should understand regarding staff:

Exempt vs. Nonexempt employees
Full-time vs. Part-time employees
Workers’ compensation insurance
Independent contractor status
Agency-provided labor
Let's explain each of the above issues in more detail.

Exempt vs. Nonexempt Employees

It is common practice for many companies to employ certain staff as salaried workers as a means
to make certain that those employees are exempt from overtime pay. But simply putting someone
on salary does not automatically make him or her an exempt employee.
Department of Labor sets the test standards for exempt/nonexempt employee status. In the
simplest terms, nonexempt employees are hourly with overtime rights, and exempt employees
are salaried. The complete definition has more to do with job description and function than how
an employee is paid. Nonexempt employees are eligible to receive overtime pay regardless of
whether they are paid hourly or salaried. Because most employee functions are nonexempt
work, the law defines only the exceptions. That is, everything that is not exempt must therefore
be nonexempt.
The laws that address overtime pay are specified in the Fair Labor Standards Act. The FLSA does
not apply to all companies or all employees, but the exceptions are somewhat specific, and so
you should seek professional counsel before classifying any worker as exempt, as the financial
penalties for incorrectly paying overtime are severe.
Any discussion of overtime exemptions usually leads to a review of comp time policies. "Comp
time" is time off with pay in lieu of overtime pay. With few exceptions, private companies
cannot legally substitute comp time for overtime for nonexempt employees. Some exempt
employees can be compensated with comp time, but be sure your application of exempt status
is accurate. The FLSA clearly states that overtime for nonexempt workers is equal to one-and-a-
half times their normal hourly rate for all hours worked in excess of 40 in a given workweek.

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