FLSA Overtime Eligibility Rules: What You Need To Know

The new FLSA overtime eligibility rules, taking effect December 1, 2016, are expected to impact millions of salaried workers.  Currently employees earning $23,660 or less annually are automatically eligible for overtime pay; the new regulations will increase that threshold to $47,476 annually, regardless of the employee’s job function.  This new requirement will impact most organizations and can present financial and cultural challenges. Those who do not comply by 12/1/16 face hefty fines and potential lawsuits. While there is talk of a possible delay in the implementation date we are advising clients to prepare anyway – there may not be a delay and if there is, it isn’t expected to be for more than a few months.

We recommend you, at a minimum, do the following, as soon as possible, to comply with the law by December 1, 2016:

• Review positions, job descriptions and compensation to determine impact.
• Determine pay methods for newly categorized non-exempt staff – salary/hourly/other (for example based on the fluctuating work week option).
• Evaluate if: job descriptions should be updated, salaries should be revised, or hours and workloads should be realigned to manage/address the impact of the change on your organization.
• Assess your record-keeping processes and make sure they will meet the new timekeeping requirements.
• Develop a communication plan to message the change to employees and provide direction to newly eligible employees who may now need to track their time, manage their workloads to no more than 40 hours a week, etc.

There are a number of steps you can take to manage the impact of the regulations on your organization.  Insource’s HR consultant are professional with industry-specific knowledge and experience who can help your review the classification of your current staff and plan for the revised rules.  If you have questions about implementing the new DOL rules, or for more information on this topic, contact Saleha Walsh at swalsh@insourceservices.com or 781-235-1490.