The Department of Labor (DOL) released its final regulations making changes to Part 541 governing overtime exemptions under the Fair Labor Standards Act (FLSA). Here are the changes:
- Salary Threshold changed to $913/week ($47,476 per Year).
- Annual Automatic Salary Threshold Increases every 3 Years (Not Annually) to Maintain Level at 40th Percentile in Lowest-Wage Census Region
- Effective date is December 1, 2016
- Duties Test Remains Unchanged
What steps should you take?
Many of your employees have heard or will soon hear about this change. We recommend you reduce the element of surprise – share with your employees what may happen and why it’s happening so they don’t link it to their performance.
Help employees get comfortable with this change by reminding employees that if their exemption status changes, they will now be paid for any time after 40 hours worked in a work week.
If your company does not allow overtime, please be ready to answer any questions or comments made regarding this. They may be considering non-exempt as an 8-5 day, however, you as a company may allow for flexibility in their schedules such as modifying to adjust for a day they stayed late by adjusting the time on another day during that same work week.
The new rule doesn’t require employees become hourly workers. They can still be paid a “salary”, but also paid overtime for any hours worked over 40.
There are other variables to consider when changing status’. We are here to help and work closely with you to make you comfortable with these changes.
If you have any questions, please give us a call at 361-854-5151.