Dramatic Change in DOL Overtime Rules Finalized
Published on by Cheryl Ganim in Benefit Plan Audits, Construction, Firm News, Health Care, Manufacturing, Not-for-Profit, Technology, Wholesale / Distribution
Over the past several months, the U.S. Department of Labor has been developing new rules that would raise the salary threshold for whether an employee is exempt from overtime pay. On May 18th, the final regulations were released, and they present a dramatic change from the current rules. Millions more employees will now be eligible to receive overtime pay.
Here are some of the critical details from the new regulations:
What do I need to know?
- Increased Salary Threshold: The new threshold is $47,476. This is more than double the current threshold. If any salaried employee is making under this amount, they may be eligible for overtime pay.
- Timeline: Employers will have until December 1, 2016 to comply with the new rules.
- Updates: The salary threshold will be updated every three years, indexed to the 40th percentile of full time salaried workers in the lowest-wage region (currently the Southeast).
- Duties Test: There is no change to the duties test.
What do I need to do?
- Does This Affect You?: If any of your salaried employees fall under this threshold, or if you might hire someone in the future under this threshold, you need to consider making changes now.
- Tracking Hours: All affected employers will now have to track the hours of their employees to calculate overtime.
- HR Issues: New overtime policies, job descriptions, and employee handbooks will need to be developed to reflect these new regulations.
- Consider Alternatives: There are a myriad of ways to stay compliant with these new rules while also accomplishing your business goals. How you utilize and compensate your employees has to be reconsidered in light of these changed regulations.
Who can I ask for help?
These changes are estimated to make an additional 4.2 million American employees eligible for overtime pay. Planning ahead and making changes now is essential before the December deadline. For additional information about the DOL regulations, and for ideas on how to stay compliant while furthering your business goals, have a Barnes Dennig team member reach out to you here, or give us a call at (513) 241-8313.