Rice Law Office Blog

This is the final blog in our four part series reviewing the changes technology has brought to the workplace, and employment law.

Many employees answer emails outside of work hours every day, and in some cases, their employers are liable to pay for those hours worked. Most American adults own a smartphone, and even if their employers don’t require it, checking email outside of work can eat up hours of time. For companies that don’t have policies to address how offsite emailing affects wages and hours, this is a significant liability. 

Employers must pay their employees for time that they are required to be on duty at the work premises. The Fair Labor Standards Act also indicates that employers are liable to compensate hourly employees for time that they are “suffered or permitted to work”. The bottom line is that if your employer knows you’ve been emailing for work, event if its only a few minutes, then your time spent is likely compensable. When emailing outside of work pushes you into overtime hours the extra wages due can be significant. See DOL factsheet

Not all employees need to be paid for their time emailing outside of work. Exempt employees are paid are paid a set salary to complete a job regardless of the number of hours it takes. Therefore, answering work emails from home does not affect a salaried employee’s right to pay.

Technology is changing the way we interact with the world, including the way in which we work. This change has helped drive business productivity, but as we’ve noted throughout our series of blogs on the topic, it has also blurred the line between work and personal time. Employment law is still adjusting to the new dynamics created by mass mobile connectivity, and there will be more attention on this issue in the coming years.  

On June 30 the Department of Labor (DOL) released a proposed rule that would result in nearly 5 million additional American workers receiving overtime compensation. As it stands, an employee making more than $455 a week is exempt from Fair Labor Standards Act (FLSA) requirements for overtime pay. The new rule raises the exemption floor to $921 a week, meaning many more workers will qualify for overtime pay if they exceed 40 hours of work per week.

The new rule has been expected since President Obama directed the DOL to review white-collar exemptions to the FLSA in March 2014. Under the previous exemption requirements, a white-collar employee earning more that $23,660 a year could not qualify for overtime compensation. The new rule raises the annual earning floor for exempt employees to an estimated $47,892 a year. This income level represents the 40^th percentile for full-time salaried workers in the U.S. 

The DOL has posted a fact sheet reviewing key provisions of the new rule. Specifically, the fact sheet lays out three changes proposed under the new rule: 

1. Set the standard salary level at the 40th percentile of weekly earnings for full-time salaried workers ($921 per week, or $47,892 annually);
2. Increase the total annual compensation requirement needed to exempt highly compensated employees (HCEs) to the annualized value of the 90th percentile of weekly earnings of full-time salaried workers ($122,148 annually); and
3. Establish a mechanism for automatically updating the salary and compensation levels going forward to ensure that they will continue to provide a useful and effective test for exemption.

While the rule is not yet final—it will remain open to comments for 60 days once published on the Federal Register, at which point comments will be reviewed and the rule finalized—it will likely remain close to its current form. This could mean big changes in compensation for millions of American workers, and will necessitate change in compensation policies for companies around the country.

To understand if you qualify for overtime under the new regulations, or whether your business needs to change how it compensates employees, you may want seek the guidance of your attorney.