Frequent readers of my blogs are aware that the Department of Labor recently issued new rules governing overtime that take effect December 1, 2016. Summer is flying by and by the time we get to Labor Day (September 5), you'll have less than 90 days to be compliant with these rules.
Here's a quick review. The salary test for most of the Fair Labor Standards Act exemptions has essentially doubled from $455 per week to $913 ($23,660 to $47,476 annually). This means unless your salaried employees spend most of their time in outside sales or meet one of the other rare exemptions, they are no longer eligible to be treated as exempt if their weekly salary is below $913 week, no matter what their duties are.
I've gotten quite a few calls asking for opinions about specific jobs in recent months, and have written a few opinion letters (each with the appropriate disclaimer that I am providing the opinion of an HR professional only and I am not an attorney nor pretending to be one). The interesting thing I find is that many of those jobs were improperly classified to begin with. They met the old salary test but failed the duties test.
It's the salary test that's been in the news this summer, but each job must also meet the standards of the duties test. And this seems to be the forgotten piece of the equation and has put many organizations at risk and they may not have known it.
So between now and December 1 make sure you've reviewed all the exempt positions in your organization to consider both the new salary test and the duties tests to make sure that you are compliant. That's the easy part. Converting everyone who needs to be reclassified to non-exempt - that's the hard part. So develop a strategy for what you're going to tell them and what is expected of them regarding the maintaining of time records, managing their hours, etc. going forward.
If you need some assistance from a third party to conduct the analysis or to communicate the message, feel free to call The Davidson Group.
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