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New DOL rules would add paperwork on every employee

05/04/2010

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If the U.S. Department of Labor has its way, employers will soon be required to prepare detailed records on every worker’s status under the Fair Labor Standards Act (FLSA) and how that person is paid—and provide the information to every worker, and provide it to the DOL upon request.

The new requirements—which won’t be binding for several months at least—are tucked into the department’s just-issued Spring 2010 Regulatory Analysis, a document that deals mostly with occupational safety and health issues in the wake of the Upper Big Branch Mine explosion in April.

But when the requirements see the light of day, they could cause a massive paperwork headache—and an outpouring of employer outrage.

Already, the U.S. Chamber of Commerce has blasted the proposals as micromanagement, and employment law blogger Lisa Guerin says they represent “a broad paradigm shift” that will redefine how the DOL handles enforcement of the FLSA.

According to a DOL statement, the new requirements are, in part, a response to the department’s inability to handle enforcement on its own.

“Employers and other regulated entities must take responsibility to find and fix problems rather than wait for a Labor Department investigator to inspect, discover the problems, and enforce the law,” the statement said.

Every employer with exempt employees

If the new requirements are approved, every employer with exempt employees would have to:

  • Perform a classification analysis explaining why each employee is exempt from the FLSA
  • Provide a copy of the analysis to each employee
  • Retain the analysis and provide it to DOL Wage and Hour Division inspectors if they request it.

In addition, employers would have to provide every worker with “basic information about their employment, including how their pay is calculated.”

Those requirements would effectively add another layer of recordkeeping for every employee in the U.S.

The DOL plans to issue a formal Notice of Proposed Rulemaking in coming weeks. A public comment period of several months usually follows the formal notice, after which the rules may be amended or enacted. The process typically takes a year or more.

Misclassification crackdown to continue

The new requirements come on the heels of renewed DOL efforts to crack down on misclassification of employees as independent contractors. 

The DOL’s Spring 2010 Regulatory Analysis vows to continue that enforcement effort.