There’s a clearer indication of when the updated Fair Labor Standards Act (FLSA) OT regs will be finalized.
You can expect to see the revised regs on overtime and minimum wage exemptions in July 2016.
That’s what the Dept. of Labor (DOL) recently said in its fall 2015 regulatory plan.
The agency also recapped three proposed changes that are just around the corner for employers:
1. Employees’ salaries would need to equal the 40th percentile of weekly earnings for full-time salaried workers to qualify for the executive, administrative, professional and outside sales exemptions.
During 2016, that’s projected to be:
- $970 per week, and
- $50,440 per year.
2. Total annual compensation for exempt highly compensated employees would jump to the 90th percentile of weekly earnings for full-time salaried workers. The annualized value is expected to be $122,148 in 2016.
3. The salary and compensation levels would be automatically updated each year.
More work for you
For your Payroll department, the reg changes will mean more work. During the first half of 2016, CFOs may ask Payroll to track time and attendance information it hasn’t had to bother with before, such as overtime hours worked by exempt employees.
Depending on what’s best for the bottom line, you may ask you to increase certain employees’ salaries, so they can retain their exempt status.
Or say some non-exempt employees currently earning $52,000 per year are exempt.
Previously, even if their weekly earnings were inconsistent, Payroll probably didn’t need to monitor whether they were being paid on a salary basis.
But if the regs go through as is and someone doesn’t earn at least $970 every week, employers should be ready to:
- work with HR to reclassify that person as nonexempt, and
- make sure supervisors approve overtime for hours worked over 40 in a workweek, explaining to them that failing to do so will be a violation of the FLSA.