Upcoming Changes to Federal Overtime Rules

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UPDATE: The overtime rule has been blocked. Please click here to view our updated information about the FLSA changes regarding federal overtime rules. 

On December 1st, 2016,  there will be important and dramatic changes to the federal overtime rules.

These changes are imminent and will impact which of your employees will be eligible for overtime.

The Department of Labor is expected to release final changes to the regulations governing overtime under the Fair Labor Standards Act (FLSA). Upon this release, businesses will have 60 days (until February 1st, 2017) to comply with the new rules.

It is possible some of your current employees will no longer be exempt from overtime pay. The proposed changes to the overtime regulations will nearly double the minimum weekly salary threshold for overtime eligibility – from $455 per week to an estimated $913 a week. This means the minimum exempt status threshold is expected to jump from $23,660 to $47,476 annually. As a result, employees who earn up to $47,476 annually will have to begin tracking their time and attendance.

The proposal also includes an increase in the salary level for highly compensated employees (HCE) from $100,000 to $134,004 annually. In upcoming years, the proposed rules will establish an automatic update every year of both the salary and compensation levels.

How to plan for the proposed overtime rules:

The impact of these changes could be both costly and widespread. It is important for your business to have a plan. Follow these four steps:

Step One: Identify which of your exempt employees could be affected by the new regulations.

Step Two:  Communicate the changes to your internal staff, making sure each employee understands how the new regulations will affect their status.

Step Three:  Review your company policies and procedures, most importantly, policies that deal with timekeeping and working hours.

Step Four:  Set aside time to train your supervisors and managers. This will ensure that new and updated company policies/practices are accurately communicated, understood, followed and enforced.

As soon as these regulations are issued in their final form, we will analyze them and be ready to advise you.

Aliat will help you evaluate your current workforce in order to develop a plan that ensures your company is in compliance with the new rules. With our solutions, we can help you prepare for and execute this transition in a manner that is seamless, compliant and cost effective.

If you have questions about the proposed changes, please contact us.