Overtime Rule Changes Go Live on Dec. 1, 2016
The Department of Labor has announced changes to the Fair Labor Standards Act (FLSA) exemption that will become effective later this year. As a result, an additional 4.2 million salaried white-collar workers will be eligible for overtime pay.
Employers who have been monitoring the years-long process now have a go live date.
Under the old rule, white collar employees were required to receive overtime pay if they earned less than $455 per week or $23,660 a year. Effective Dec. 1, 2016, the minimum salary level rises to $913 per week or $47,476 annually. The rule also establishes an algorithm to determine future adjustments to the minimum salary requirement.
Now that an effective date for the new overtime rules has been set, we're making customers aware of the changes. Included in our recommendations for ensuring compliance and controlling payroll costs related to the new rules are:
- Read the new Fair Labor Standards Act (FLSA) rules.
- Determine the impact on your company by identifying employees who will be affected. If you haven't done so already, review job duties and develop compensation plans to review the cost of increasing salaries. You may also consider reclassifying affected employees as non-exempt. However, that will require tracking their hours and paying overtime pay when they work more than 40 hours in a work week.
- Explore time-tracking software to automate the process of tracking and managing the new time-keeping responsibilities for your reclassified employees.
- Review your overtime rules. Are employees required to get written permission before working overtime hours? If not, you may want to update your policies and procedures to accurately track and control overtime costs.
We're here to help our customers. If you have questions, call (952) 835-0100. Our support team will walk you through the rule changes and discuss the ways that our software can help you comply.
