AK Webinar Recap | Must-Know Compliance Queries for Managers

In February, Adams Keegan advisors Charles Rodriguez and Brandon Roland held a live discussion addressing some of the most common and misunderstood compliance questions managers face, including real-world scenarios, identifying where risk often arises, and how to approach these issues with confidence and consistency. 

Topics included distinguishing between salary and exempt employees, how to handle last wages and deductions upon separation, and whether an at-will termination can be called a layoff. The team also provided an update on OBBBA reporting rules for 2026 and addressed questions throughout the session.

Did you miss it? Click here to access the full recording.

What’s the difference between salary and exempt employees?
Salary and exempt are not interchangeable terms. “Exempt” refers to classification where employees are not entitled to minimum wage and overtime requirements under the Fair Labor Standards Act (FLSA). Non-exempt employees are entitled to this, regardless of how they are paid. The default classification is non-exempt, and the burden of proof rests with the employer. To qualify as exempt, an employee must meet two tests:

• Duties test: Their primary job responsibilities must fit within a recognized exemption (executive, administrative, professional, etc.).
• Salary threshold test: They must earn at least $684 per week under the reinstated federal rule.

Importantly, a non-exempt employee can still be paid on a salary basis. In that case, the salary acts as a guaranteed minimum, but hours must still be tracked and overtime paid. Salary does not eliminate overtime obligations.

If no time records exist, agencies may rely on the employee’s estimate of hours worked, potentially looking back three years. Routine audits of job duties and payroll classifications are critical.

What is a layoff and what is not?
Generally, separations fall into three categories:

• For cause: The employee violated policy or failed to meet expectations.
• Layoff: The separation is driven by business necessity, not employee fault.
• At-will: An employer may terminate for any lawful reason, but relying on “no reason” often creates risk.

A layoff occurs because of business conditions, such as restructuring, funding changes, or reduced workload, and is not based on performance. If performance was the issue, calling it a layoff to soften the conversation can create credibility problems later.

Employers should ask these questions: Was there truly a reduction in work? Was there an immediate replacement hire? Was this actually a reorganization strategy? If a new employee is hired into the same role shortly after a so-called layoff, the narrative becomes difficult to defend. Performance may factor into determining who is selected in a legitimate workforce reduction, but performance is not the reason for the layoff itself. Precision in language and documentation protects credibility and reduces exposure in unemployment claims and agency investigations.

How should last wages be handled?
Final pay is one of the most frequently misunderstood compliance areas, and it is governed largely by state law.

Key questions include:

• What is the employee’s official last day?
• When is final pay legally due in that state?
• Are deductions permitted?
• How must payment be delivered?

Some states require immediate final pay upon discharge, while others permit payment on the next regular payday. The timeline often differs depending on whether the separation was voluntary or involuntary.

Employers must also distinguish between the last day worked and the official termination date. An investigation may justify a later separation date, but pay cannot be delayed for administrative convenience. Errors in final pay handling frequently lead to penalties and disputes — risks that are avoidable with proper planning.

These three issues represent critical moments in the employee lifecycle. In the session, the team also addressed 2026 compliance updates, including OBBBA’s reporting implications for no tax on tips and overtime provisions, as well as evolving EEOC guidance on reverse discrimination.

View the webinar here and give yourself about 40 minutes to take a deep dive into the conversation.