The US White House confirmed yesterday that the Department of Labor has approved a series of changes to the federal Fair Labor Standards Act (FLSA). These changes have been rumored for the last 18 months. Now we finally know the details. It’s time to take action!
It happened. Are you ready?
You have to comply by December 1, 2016, regardless of the size of your business. There’s no better time than now to get to work.
The FLSA bases an employee’s eligibility to earn overtime on a few factors. One is salary.
Change #1 – Salary Threshold Changed to $913/week ($47,476 per Year)
The current wage threshold is half of this number ($455 per week). What this means is anyone who earns less than $913 per week is eligible to earn overtime. It doesn’t matter what their job duties are. The salary threshold is the first factor to review.
Change #2 – Salary Threshold Increases Every 3 Years (Not Annually)
Your company needs to be prepared to accommodate the increases every three years.
Change #3 – Highly Compensated Employee (HCE) Exemption Is Now $134,004 Per Year
If you have people who earn this amount per year – even if their job meets the basic requirements in something called a “duties test” – they do not need to be paid overtime. Don’t know if you have anyone on your staff like this? We should talk!
The DOL did not change the duties test you are already using. Not using one? We should talk!
If you’re going to meet compliance standards it will take time to do analysis on your current wage practices, evaluate job duties and set a plan with your payroll company to ensure compliance. Oh and you should educate your employees. Sounds like a fun summer, right? It’s going to be okay. But get help if you bed it. Here is a link to my calendar if you want to schedule a meeting to put together your strategy.