Department of Labor Issues Final Rules—Is Your Company Ready to Make the Change?
In case you missed our previous article, on May 18th the Department of Labor (DOL) issued final rules on New Overtime Exemption Rules which will take effect on December 1, 2016.
The minimum salary required to classify an employee as “exempt” from the Fair Labor Standards Act (FLSA) White Collar Overtime Requirements will increase from the current $455 per week to $913 per week—which comes to $47,476 annually. Under these coming changes, employees paid less than $913 per week will be automatically entitled to overtime pay.
To comply with the new rules, employers with exempt employees earning below $913 per week will have essentially three options:
1) Maintain the exemption by providing employees with a salary increase, or
2) Reclassify the employees to non-exempt and pay overtime for work over 40 in a workweek; or
3) Reclassify the employee as non-exempt, but setting the hourly rate to minimize additional labor costs.
Have you been talking with your workers that will be affected? In addition to having these conversations, it is always a best practice to implement changes of classification or salary in writing to your employee.
When choosing to reclassify your employees earning less than $913 per week, you should require they track their start times, end times, break times and meal times. This is a great opportunity to ensure your employee handbook is up-to-date so your employees know what your policies are regarding meals periods, breaks and tracking their hours.
If keeping up with all these new changes prove to be an administrative nightmare, consider looking to Cardinal Services for help in monitoring rule compliance for your company. We offer a wide variety of workplace solutions such as time and attendance options and free FLSA review. We can also create, review, or assist in the preparation of new or existing policies and handbooks. Give us a call at 1.800.342.4742 and ask to speak to a member of our HR team!