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It is time to review how your U.S. employees are classified for Fair Labor Standards Act (FLSA) overtime pay determinations. Under the federal FLSA, most workers are classified as either exempt or non-exempt depending on their salary and the type of work they do. The FLSA requires that in addition to paying at least the minimum wage employers also must pay overtime to employees who work more than 40 hours in a given workweek, unless they meet certain exceptions. Until recently, to be excepted, or “exempt” from FLSA minimum wage and overtime requirements, employees had to meet certain job duties tests and receive at least $23,600 in annual salary. Under the Final Rule issued by the Department of Labor on May 18, 2016, the job duties tests remain the same but the threshold salary level is raised to $47,476 annually.
This means some of your employees, accustomed to receiving overtime for hours worked in excess of 40 per week, will now be exempt from federal requirements for such pay. This may be good news for employers, and mixed news for many employees. How an employer addresses the changes made possible by the new wage threshold may impact employee morale and retention. There are a variety of creative methods to fulfill requirements of the new Rule.
The Final Rule becomes effective December 1, 2016, and includes other changes to “white collar” worker wage requirements. State wage and hour laws may also be implicated, depending upon your jurisdiction. Establishing which of your employees are impacted by this new rule, and how to implement changes, requires careful thought and planning. Consult an employment law attorney at your Ally Law member firm to make these decisions, construct a roll-out program, and assure your policies and procedures are compliant with the new Final Rule. Ally Law member firms in every country have employment and labor law attorneys well-versed in current law and the execution of revised and necessary policies and procedures. For more information about our services in this area, contact us at yourally@ally-law.com.
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By Much Shelist.
