Here's a quick guide to understanding the proposed changes.
Please note - The tips outlined in this article should not be used in place of legal advice.
The Department of Labor (DOL), guided by the Fair Labor Standards Act (FLSA), proposed a new rule that, if passed, will change the salary threshold for overtime eligibility. Here’s what you should know.
The proposal hasn't been approved yet
Keep an eye on the Federal Register - a daily journal logging U.S. government activity. This proposal has not yet been published to the Federal Register but when it is, the public will have 60 days to make comments on the proposed rule. If passed, experts believe the changes won’t go into effect until 2020.
It doesn't apply to everyone
Not everybody will be impacted by this proposal. Here are just some of the positions this rule won’t impact:
- Exempt employees
- Part-time workers
- Police Officers
- Fire Fighters
- Paramedics
- Nurses
- Laborers
- Non-Management employees
Overtime salary requirements would change
It’s estimated that over one million American workers would be eligible for overtime pay under the proposed rule.
Currently, employees making below $23,660 annually (or $455 per week) are eligible for overtime pay if they work over 40 hours in a work week. Under this rule, that threshold would be increased to $35,308 annually (or $679 per week).
The threshold for highly compensated employees would change from the current level of $100,000 to $147,414.
What won't change?
- How overtime is calculated
- Employee classifications
What to do if the proposal is passed
- Get educated.
- Turn to your legal counsel to understand exactly what you need to do to update your processes and stay compliant
- Audit your current practices.
- Perform a job duties audit on current employees and ensure your future and current job postings match. Those employees whose duties primarily involve executive, administrative or professional tasks are included in the new proposal.
- Manage the changes
- This update could dramatically change the way you track time and exemptions today. BirdDogHR can help manage these changes and more with comprehensive talent management software.
Still have questions on the DOL proposal? BirdDogHR can help. Schedule your free HR assessment today to ensure you're prepared if this proposal is approved.
