Five things to know about new overtime regulations
FLSA changes on the way
You may have seen headlines recently about changes to overtime tracking. The new rules were finalized this month under the Fair Labor Standards Act, and bump the salary threshold for overtime pay from $23,600 per year to $47,476 per year. The DOL estimates 4 million employees will be affected by the change. So what do you need to know?:
1. The salary level will be increased each year
For the next 10 years, the salary threshhold for overtime pay will be increased based on percentiles of earnings and/or changes in inflation. This means in the next 10 years, up to a million more employees could be affected.
2. The effective date is December 1.
The initital increases are effective as of December of this year. Future updates to the salary thresholds will take place every three years, beginning on January 1, 2020.
3. Employers will spend $592.7 million to comply with the new rule
The DOL estimates that employers will spend millions to comply with the new rule. Employers will need to make changes that will include making adjustments to salaries and pay structures, putting new systems in place to monitor hours, and preparing to pay overtime.
4. State vs. federal requirements may be different
To add even more complexity, states can enact statutes and regulations that vary from the federal regulation. In these situations, employers must comply with the requirements that are “more generous” to employees.
5. Employers should start preparing now
Employers should start preparing now to lessen the challenges they will face down the road. Employers can prepare by beginning to calculate which employees would be affected, how many hours they work, seeking financial and legal counsel if necessary, and making sure they have the right tools in place for the future.
Time and attendance tracking is also coming to BerniePortal. Click here for a recording of our time and attendance tracking webinar.
There is no “magic bullet” for all employers, and solutions will vary from employer to employer. While these changes can be a challenge, advanced planning can ease the transition.
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