The new Department of Labor’s (DOL) regulations regarding overtime take effect on December 1, 2016. With this deadline fast approaching FHKAD has compiled some tips for employers:
• Employers should examine all current exempt positions to verify that they meet the regulations new salary and duties test.
• If current exempt employees do not meet the DOL’s new salary threshold ($47,476) employers may consider increasing the employee’s compensation to meet the new threshold so that employee can remain exempt. This may be the most cost effective solution in some instances where the employee’s current salary is just shy of the DOL’s threshold and the employee typically works more than forty hours a week.
• If an increase in compensation to retain an employee’s exempt status is not feasible or desirable the employer must reclassify the employee as nonexempt and pay overtime for any hours worked over forty.
• Train newly nonexempt employees on time-keeping and overtime procedures. Employees need to be instructed to accurately record all time work.
• Consider implementing a policy to prohibit overtime without advanced authorization. This may help reduce overtime payroll costs. Employers can discipline employees for working overtime if the employee did not receive prior authorization. However, it is important to remember that this does not mean that the employer can refuse to pay the employee for the time worked. According to the Fair Labor Standards Act, the employer still must pay the employee for any overtime hours work without permission.
• Remember to communicate clearly with all affected employees. Employees may view their change from exempt to nonexempt as demotion. Take the time to explain the new regulations to your employees and make it clear that that change is not reflection of employee’s performance or status within the company or organization.
For more information or advice on implementing the DOL’s new overtime regulations, feel free to contact the attorneys at FHKAD.