A Guide to DOL Proposed Overtime Rule Changes

By now, you have probably heard some piece of information surrounding the Department of Labor’s (DOL) proposed overtime rule changes. While the DOL’s comment period ended on September 4, several sources seem to indicate a high likelihood that a final rule could be issued either late this year, or very early in 2016.

To help you and your business stay up-to-date, we’ve created a quick list of key highlights regarding the proposed rule and how it may affect you:

Goal of the Changes

To increase the number of workers eligible for overtime pay by raising the minimum salary level for employees that are classified as exempt under the executive, administrative, professional, and highly compensated exemptions.

What You Should Know

  • All employees that earn less than $50,440 will be affected by this rule change – regardless of job title or job description.
  • Exempt employees who are currently earning less than $50,440 are the employees you’ll need to focus on, as you plan on how to comply with the final overtime rules.
  • There could be additional changes to the Duties Test that employees must meet in order to be exempt.

What You Should Do

  • Identify your exempt employees who earn less than $50,440 annually.
  • Implement a time tracking system to figure out how many hours those employees are actually working each week.

Once you identify employees who are working overtime hours, there are a few options available for handling these employees’ compensation.

  1. Increase salaries for these employees above the new threshold, so that they remain exempt from overtime.
  1. Reclassify these employees as non-exempt and pay them on an hourly (or salary) basis.
  1. Reclassify employees as non-exempt and pay them on a fluctuating work week basis.
  1. Implement a policy of no unauthorized overtime. This may not work for all employers and, employees who violate this policy must still receive overtime pay.

To read the entire article, please visit www.paycor.com.

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