On May 18, 2016, President Obama announced the Department of Labor's final overtime regulations, which affect the Fair Labor Standards Act “white collar” overtime exemptions by raising the salary threshold required to qualify for overtime exemption from $455/week ($23,600 per year) to $913/week ($47,476/year).
This regulation has many implications for employers throughout the U.S.
Any business that employs exempt workers with salaries under $47,476 is directly affected by the new rule and should consider a best course of action for each affected employee.
The proposed changes will go into effect December 1st, 2016, so employers should start preparing now. Here’s how:
Notify All Departments of Final Overtime Rules
It is crucial to clue in all departments that will be affected by the new legislation. Finance departments will need to make budgetary changes to reflect impending raises, new overtime costs and compensation review processes to keep pace with the annual increases.
HR teams will have to educate themselves, so they can field questions, prepare for difficult employee conversations and coordinate with recruiting for possible turnover issues. Legal teams will need to fully understand the changes and ready themselves for impending compliance issues.
Additionally, executive teams and all stakeholders should be fully aware of the impact that these new rules will have on their business, so they can make the best possible decisions.
Identify Employees Who Will Be Affected by the Overtime Rules
Employees that may be affected by the new regulations are any exempt salaried employees that make less than $47,476 per year (or $913 a week).
You will also want to review the responsibilities of each job, as well as the job descriptions, to see if the primary duties fall on the exempt list, and the job descriptions accurately reflect the main responsibilities.
Employers should create a plan for each employee that falls under this category, since they may qualify for overtime pay. Each employee may require a different plan based on their role, salary, classification and the number of hours they work.
Track Employees’ Hours
One of the most important things you will need in place to comply with the new overtime regulations is an accurate calculation of employee hours worked per week.
This will require that employers have a time tracking solution capable of accurately collecting employee hours and providing real time reports with the employee’s rate of pay. It will be critical that employers have a clear audit trail of hours worked for a number of reasons.
Sign Up for EPAY’s DOL Overtime Compliance Solution
EPAY Systems can help prepare you for the December 1st start date. EPAY’s DOL Overtime Compliance Solution-In-a-Box includes:
- Unified payroll and time & attendance technology to track employee hours and view compensation.
- A set of comprehensive reports to understand how employees’ hours are trending as well as job tasks.
- Real-time alerts to flag employees approaching overtime.
- Live 24/7 customer support to help you interpret the new rules and advise on employee communication if HR changes need to be made.
- Quick start implementation to ensure your DOL time tracking and analysis can begin within 30 days.
Sign up for EPAY’s DOL overtime compliance solution by July 30th to receive an account credit of up to a $2,000*.
*The credit amount will be calculated based on total actual employee count and EPAY Systems services selected. Clients purchasing an EPAY Payroll and Time and Labor solution with 300 or more employees will receive the full $2,000 credit. Credit will be applied to client’s account on December 1, 2016. In order to retain such credit, Client must remain an EPAY client for at least two calendar years. This offer is provided at EPAY’s sole discretion to select potential and existing clients. No other EPAY discount offers can be combined with the DOL Compliance Solution-In-a-Box.
