One of the biggest HR topics last year was the Notice of Proposed Rulemaking in regards to the FLSA Overtime Exemption. While the final rule has not been published, and therefore the standards and amounts are not set in stone, the NPRM has slated that the minimum annual salary threshold for executive, administrative, and professional overtime exemptions will in essence double by increasing from $23,660 to $50,440.
The Department of Labor is planning on issuing a final rule during the spring of 2016, and the effective date of the final rule would be 60 to 120 days after publication; but this is just speculation; thus now is the time to make sure you are prepared.
Below is a check list to get you started on making sure you are ready for the proposed changes. Please keep in mind that every business and industry is different, so this is not a comprehensive list, but rather a good starting point.
- Review employees job descriptions. Are they still accurate? Do the actual job duties fall within the exempt status?
- Identify exempt salaried employees with a salary below $50,440 or $970 per week.
- Identify the true hours worked per salaried exempt employee who makes less than $50,440 yearly. Start having salaried employees, which are below the $50,440 threshold, track their actual time worked if they are not already.
- Determine if it is better to raise the employee’s salary to 50,440 based on the average number of hours they are working, or if it is better to classify them as non-exempt from overtime.
- If reclassifying to non-exempt, determine if you will take their current annual salary and divide it by 2080 (40 hours per 52 weeks a year) to achieve what their new hourly rate may be.
- If employees, who will be reclassified as non-exempt, are consistently working over 40 hours per week, consider if overtime will be allowed or if it will be discouraged, and if so how much will be allowed.
- If you will implement a policy discouraging overtime for employees newly classified as Non-exempt, determine if certain tasks and jobs will need to be reassigned to another employee.
- Determine if additional employees need to be hired as a result of job duty changes, rather than possibly incurring additional overtime.
- Take a look at “remote work” for salaried employees. If employees who are currently exempt will be reclassified as non-exempt, now is the time to look at your policies regarding after work hours business phone calls and emails that are being read and/or responded to.
- Prepare a plan of how to explain the classification changes to employees, and what the changes will mean to them and their paychecks.
Summing it up, look at job descriptions, pay rates near the threshold, and especially at hours worked. If you are unsure of just how many hours those exempt employees are working, now is the time to start tracking them.
For further questions regarding the proposed changes, please contact our HR/Client Services Department at 770-339-0000 or ClientServices@hr-startegies.com. If you are in need of a Time & Attendance solution to track your employees hours, Please contact us at 770-339-0000 or TimeTracker@hr-strategies.com
The first time clock was invented in the late 1880’s by Willard Bundy, a jeweler in Auburn, New York. With the increased workforce during the industrial revolution it became more inherent that both workers and employers have a more accurate way of recording hours worked; previously detailed logs had been kept by hand.
Today’s time clocks have become much more than simply punch recording devices. Punch Clocks have moved beyond simple time recording, to becoming Time & Labor Management systems. These days employers are not only using the systems to record hours worked, but to allocate the hours over many cost centers; to accrue, request, and allocate time off benefits; to schedule their employees shifts to provide accurate coverage, and much more.
Technology allows employers a wide variety of data collection devices for time recording including: traditional swipe, personal handheld devices (PDAs), Biometric (hand recognition, fingerprint), and external systems (access control, phone switches), to name a few.
Call us today to find out how we can customize a Time and Labor Management solution for your company, and stop “just” punching the clock.