Company Overview:

The company is a leader in the healthcare advertising space. It is a global organization in 4 regions with a significant workforce in the United States. There were ongoing issues regarding maintaining compliance with employee exemption status, which lead to potential lost revenue due to incorrect employee wage payments. To address this issue, I assessed, educated, and implemented a centralized audit process to review exemption status and ensure alignment, leading to improved compliance and cost savings.

Problem Statement:

The problem at hand was the unintended non-compliance with exemption status for employees in the United States. The misclassification of employees as exempt or non-exempt can lead to:

- Inaccurate wage payments.

- Potential legal issues and penalties.

- Lost revenue due to overpayment or underpayment.

Objectives:

- To assess the current exemption status of all employees.

- To educate HR and management on exemption status criteria and regulations.

- To implement a centralized audit process to ensure accurate exemption status classification.

- To maintain compliance and mitigate lost revenue due to incorrect employee wage payments.

Analysis:

I assessed employee FLSA Status versus the Job FLSA Status and identified any mismatches.
I prepared education content on DOL Regulation and state specific rules where the company had a presence. Additionally, I created employee communications and FAQs in support of this initiative.
After presenting to all key stakeholders, there was a collaborative effort between Compensation, HR Business Partners, Payroll and Employee Managers to analyze the cost and approve the plan to make the necessary adjustments.

Proposed Solution:

1. Exemption Status Assessment:

I conducted a comprehensive review of the exemption status for all employees. This involved:

- Auditing exemption status for each employee.

- Identifying areas of non-compliance and potential issues.

2. Education and Training:

- I provided training sessions for HR and management to ensure a deep understanding of exemption status criteria and regulations.

- I established clear guidelines for exemption status classification.

3. Centralized Audit Process:

- I implemented a centralized audit process to regularly review and update exemption status for all employees.

- The process includes a centralized team responsible for maintaining compliance and accuracy.

4. Ongoing Compliance:

- Continual monitoring and periodic audits to ensure ongoing compliance.

- Regular updates to exemption status based on regulatory changes and individual employee roles.

Implementation:

- The assessment, education, and centralized audit process took 2 months to complete.

- Continuous monitoring and audits are an ongoing process.

Expected Outcomes:

- Improved exemption status compliance.

- Mitigated risks related to legal issues and penalties.

- Accurate wage payments, eliminating potential lost revenue.

- Enhanced employee satisfaction and trust in payroll processes.

Budget:

The cost to correct underpayment for overtime eligible employees was approved by Finance and was reconciled for the current fiscal year as the correction was not optional.

Conclusion:

The successful implementation of a centralized audit process for exemption status compliance is a critical step in ensuring the company's commitment to accuracy, compliance, and financial responsibility. This initiative aligns with our core values of integrity and operational excellence.

Recommendation:

I recommended the ongoing maintenance and review of the centralized audit process along with the process map I created to ensure that they continue to maintain compliance and eliminate potential lost revenue. This strategic initiative was essential to the long-term financial stability and risk mitigation.