Days Until New Overtime Rules Take Effect Blog Law and the Workplace
- Author: Zachary Reyes Nov 03, 2016,
Nov 03, 2016, 8:07
More information about the FLSA and the upcoming changes can be found on the FLSA website. At the October 24 St. Peter City Council meeting, the council approved an increase to the salary of the recreation program coordinator in order to avoid new federal overtime rules. There are exceptions to this rule, but they are limited.
There are a couple of ways in which employees are determined to be exempt or nonexempt.
The exemptions, Downs explained, are employees who are in positions at an executive, administrative or professional capacity.
There is another qualifying factor, however. If they do the math, the employers could potentially pay said employees the same amount as they were receiving on salary.
Under the fluctuating workweek method, you include the base-rate part of the overtime premium in the employee's weekly salary, and only pay the 0.5 premium kicker as overtime. Currently, you need to earn at least $23,660 a year to be considered exempt - but the new law is raising that to $47,476. "Instead, the minimum of $913 per week applies regardless of how many hours the employee works". Employers also have to maintain records of the hours of these employees, and not just when they work overtime.
Businesses have a few choices how they respond to the changes. Your employer might even reduce your base hourly wage in order to account for the overtime pay you'll receive, thus keeping your overall annual compensation the same.
Remember that both overtime pay (for non-exempt employees) and the salary basis test (for exempt employees) are calculated on a workweek basis, and that each workweek-a fixed and regularly recurring period of seven consecutive 24-hour period-stands alone (29 C.F.R. §§ 778.103-105, § 541.602).
Classifying employees differently even though they have the same job title, same job description and (of most importance) same duties but have varying years of experience "could potentially cause the exempt-level employee to believe he or she is misclassified and/or cause the nonexempt employee to believe he or she is being treated with less respect than the exempt employee", said David Woolf, an attorney with Drinker Biddle & Reath in Philadelphia. And you are going to have to figure out what you are going to do about the situation."And for employers, including all business owners, there is a built-in adjustment to the figure every three years, Spencer said". This is the most likely option for people who work a lot of overtime or who are already very close to the new salary threshold. That's not very good for morale, and it's not very good for their attitude toward the workplace."The other big issue facing employers, according to Spencer, are employees who have iPhones, iPads, laptops and other devices in use after hours, at home."If they are tapping out an email, guess what?" Keeping salaries under the threshold and paying overtime might work, too.
As you can see, there is a clear economic advantage to employers using the fluctuating workweek calculation to pay overtime to salaried non-exempt employees.
In any case, businesses should inform their employees of the new rules, explain how they will impact the company in order to comply with the law, and train workers in timekeeping as appropriate. The DOL will start enforcing this on December 1."The important number that has to stay consistent is exempt employee pay of $913 per week, according to Debra Franklin, vice president of HR solutions, Murray Securus, Wyomissing, who spoke in the summit's breakout session". However, employers can not give comp time to meet their overtime obligations.
Some business groups and members of Congress hope to delay the department's decision, or block it in court. Any growth in part-time jobs that result will come at the expense of hours and earnings for full-time workers, he said.