The DOL overtime rule change, which affects most employers and significantly impacts how employees are classified as Exempt or Non-Exempt from overtime pay, takes effect on December 1st, 2016. Many employers are unaware of or not familiar with the full scope of the rule change that includes an unprecedented increase in minimum salary to $47,476.00 combined with specific tests to qualify employees for Exempt status. If you have not yet reviewed your employee base to determine how the rule change will affect your organization, now is the time to review the new ruling.
Here are some common questions:
“Do I really need to review this?” Yes! The rule change is a Federal Law and it affects most companies with revenues in excess of 500K annually.
“My employees are happy with how they are paid, why do we need to review this?” The rule change has increased two minimum salaries for Exemption, kept in place often misunderstood duties tests, and added a non-discretionary bonus option that may apply to some employees that fall just short of the minimum thresholds. Risks of not complying with FLSA standards include attorney fees, back wages and liquidated damages. For willful violations the DOL has a 10K per violation penalty along with up to 6 months jail time per violation.
Recently, one of my clients used Edina Circle Member Talley Flora's company - Red Seat - to assist them in figuring out what they needed to do for their employees based on the new rule. Red Seat has developed a compact, comprehensive and low cost working session to help small businesses understand and apply the rule changes. The session will help you make informed decisions on accurately classifying and communicating changes to affected employees, as well as addressing other areas within your organization that may be impacted.
The DOL has also prepared a number of resources to assist employers in applying the new rules to their organizations.
- DOL Rule Change Guidance for private employers: https://www.dol.gov/whd/overtime/final2016/general-guidance.pdf
- DOL Overtime Compensation Regulations:
You may also find this article helpful, "DOL's Revised Overtime Rules," Strategic Finance (Aug 2016).
For more information on Red Seat’s two hour working session, please contact Talley Flora at Red Seat // talley@redseat.com // (952)-893-002