By Alexandra Zabinski
Snow removal isn’t a 9-5 job. Employees may be only seasonal or temporary, and hours can fluctuate greatly, week to week. It’s not easy to decide whether snow removal employees should be paid for overtime work.
In general, U.S. employees must be paid overtime pursuant to the federal Fair Labor Standards Act (FLSA), unless they can be classified as an exempt employee. Knowing when to pay overtime is critical to risk management for small businesses, because faulty overtime policies can lead to costly legal action brought by one or multiple employee(s). Having appropriate rules and procedures in place can assist businesses in adequately identifying which employees must be paid overtime and which are exempt.
Keep reading to figure out the most common rules for overtime, which employees don’t require overtime pay rates, and how the latest Department of Labor (DOL) overtime rule might change your payroll structure.
For employees who perform manual labor (shoveling, driving vehicles, etc.), overtime pay is straightforward. For every hour over 40 worked in a given week, employees should be paid 1.5 times their pay rate. For these purposes, the best practice is to pay that employee on an hourly rather than salary basis.
Hours can’t be averaged across multiple weeks. An employer’s “work week” doesn’t have to start on Sunday or Monday; it just has to contain seven consecutive 24-hour periods. Part-time, seasonal and temporary employees should be paid overtime if they work 40+ hours in a given week. Independent contractors aren’t eligible for overtime pay.
Whether an office employee must be paid overtime depends on the employee’s duties. However, employees with primarily discretionary functions, like accountants or HR managers, or who rely on advanced training, like engineers, may be exempt from the FLSA’s overtime requirements.
What if my employees do both?
The key is whether an employee’s primary duty is within the scope of the exemptions. Courts interpret the phrase “primary duty” narrowly to mean the employee’s principal, main, major or most important duty. Determining an employee’s primary duty must be based on all facts in a particular case, with the major emphasis on the character of the employee’s job as a whole. If the primary duty falls within an FLSA overtime exemption, that employee does not need to be paid overtime.
Overtime exemptions made headlines this winter because the DOL sought to institute a rule increasing the minimum salary (currently $455/week) for an employee to be overtime-exempt. The DOL’s proposed rule would have nearly doubled that threshold to $913/week. The rule, if implemented, would mean that even if the employee is correctly classified as exempt based on his/her primary duty, that employee must be paid overtime if he or she makes less than $913/week.
The rule was slated to take effect on December 1, 2016. However, 21 states sued to have the rule repealed; and just before Thanksgiving, a federal judge blocked the rule nationwide until the litigation was resolved. The case is still pending.
If you have overtime-exempt employees, should you prepare to comply with the new rule? At this time, it’s unknown whether the rule will be upheld, and even if the DOL wins in court, the Trump administration may decide to abandon the rule altogether.
That said, it’s safest to be ready to comply. If the rule is upheld, it may be effective immediately. Businesses may want to review current wage and hour structures, note which employees might need to be restructured and ensure that all eligible employees currently receive overtime. Employee handbooks and payroll reporting systems might require updating. You may wish to speak with an attorney who can analyze your situation based on your current employee classifications.
Learn more about US Overtime Rules & Regulations: www.dol.gov/whd/overtime_pay.htm
Provinces govern Canada overtime
Canadian laws regarding overtime are provincially regulated, and many are vague in their definitions on whether snowplow operators and laborers are covered, given the seasonality of the work.
Kent Peddie, CSP, owner of Precision Snow Removal in Ottawa, says that according to the Ontario Ministry of Labour, special overtime rules apply to operators of snowplows and other large snow clearing equipment. These employees are classified under the Road Maintenance industry. They are entitled to overtime pay (1.5x their regular pay) for hours worked in excess of 55 hours in a workweek. The employer can average out the hours worked in a successive 2-week period, which can help mitigate excessive hours worked during a stormy week.
Workers in this category are not covered by the daily and weekly limits on hours of work, the daily rest period rule, the time off between shifts rule, and the weekly/biweekly rest periods rule.
People engaged in manually clearing snow by hand using shovels, walk-behind snowblowers, and other tools would fall under the general overtime rule. Employers are required to pay overtime to these employees at a rate of at least 1½ times the regular rate for each hour worked in excess of 44 hours per week. To ensure your company is in compliance, contact your provincial authority.
Learn more from the Ontario Ministry of Labour: tinyurl.com/canadajobrules
Alexandra Zabinski is a law clerk with Zlimen & McGuiness, PLLC, and a student at Mitchell Hamline School of Law in St. Paul, MN. Jared Nusbaum is an attorney with Zlimen & McGuiness, PLLC. His practice focuses on employment law, litigation, bankruptcy and appeals. Contact him at firstname.lastname@example.org.