On December 1, 2016, employers must pay extra to benefit from the Honest Labor Requirements Act’s (FLSA) so-called white collar time beyond regulation exemptions. To organize for the upcoming change, employers must know whether or not and to what extent they are going to be affected by the brand new time beyond regulation exemption laws.The brand new guidelines focus totally on the minimal wage and compensation ranges wanted to qualify for the FLSA’s govt, administrative, skilled and laptop worker time beyond regulation exemptions. Employers can ask the next questions to find out the potential impression of the brand new time beyond regulation guidelines earlier than it is too late.Are there any staff labeled as exempt beneath one of many FLSA’s white collar time beyond regulation exemptions? If no, you shouldn’t be affected by the upper normal wage ranges beneath the brand new guidelines. If sure, transfer on to the following query.Do any of those staff ever work greater than 40 hours in a workweek? If no, you shouldn’t be affected by the upper normal wage ranges beneath the brand new guidelines. If sure, transfer on to the following query.Do any of those staff earn a wage of lower than $913 per week? (This works out to $1,826 biweekly, $1,978 semimonthly, $three,956 month-to-month or $47,476 yearly.) If no, you shouldn’t be affected by the upper normal wage ranges beneath the brand new guidelines. If sure, exemption classifications or compensation practices should be adjusted earlier than December 1, 2016.
Probably the most acceptable adjustment(s) will usually rely upon particular circumstances, such because the variety of newly-nonexempt staff, their salaries, how typically they work time beyond regulation and the way a lot time beyond regulation they work. Relying on their state of affairs, employers might determine to implement a number of of the next changes.Improve Salaries. Maybe the only and least disruptive adjustment could be to extend the salaries of exempt white collar staff to a minimum of $913 per week. Sadly, it might even be unrealistic for a lot of employers. Although some wage will increase could also be small, others could also be greater than double.These selecting this feature should do not forget that exempt standing requires greater than assembly the brand new minimal wage necessities. Major job duties stay related beneath the brand new guidelines and staff nonetheless must fulfill the relevant “standard duties test” to be exempt.Pay Newly-Nonexempt Workers Extra time Compensation. The choice to growing salaries is to re-classify these exempt staff as overtime-eligible staff. These working greater than 40 hours in a workweek should be paid one and a half instances their common charge. Keep in mind that employers should observe the each day and weekly hours labored by all nonexempt staff, together with the newly-nonexempt.Paying time beyond regulation compensation will not be an issue for workers who hardly ever work or who work little or no time beyond regulation. Regardless of paying extra for infrequent time beyond regulation work, it might nonetheless be inexpensive than growing salaries. The identical can’t be mentioned about staff who often work or who work a variety of time beyond regulation. Their time beyond regulation pay can add up shortly, probably approaching and even exceeding $913 per week.Prohibit Extra time. Newly-nonexempt staff may be prohibited from working time beyond regulation. If no time beyond regulation is labored, no time beyond regulation compensation is required. This selection could also be easy, nevertheless it will not be simple. Exempt staff usually work greater than 40 hours in a workweek as a result of they’ve greater than 40 hours of labor to do. Their work should nonetheless get carried out, however another person must do it.Regulate Personnel, Schedules or Assignments. Those that prohibit time beyond regulation might must make varied operational changes. For instance, workload distribution and workforce scheduling might should be adjusted to compensate for the lack of time beyond regulation work. In some instances, new staff might should be employed to make up for any misplaced productiveness.Regulate Wages. Newly-nonexempt staff who’re allowed to proceed working time beyond regulation as all the time will find yourself getting extra money for a similar quantity of labor. Reallocating common wages and time beyond regulation compensation is a technique to preserve the hours labored and quantities paid to newly-nonexempt staff largely the identical. Nonetheless, employers might not cut back an worker’s hourly wage under the best relevant minimal wage (federal, state, or native) or frequently modify wages every workweek to govern the common charge.
Employers should not wait too lengthy to start out planning. It takes time to vary exemption classifications and compensation practices, notably if they’re substantial or complicated. With all of the publicity, it is protected to imagine that violations can be observed not solely by those that are affected by the brand new guidelines, however by the Division of Labor too.To guard towards the uncertainty and confusion surrounding the brand new guidelines, employers might profit from having Employment Practices Legal responsibility Insurance coverage to guard towards varied employment-related claims. Restricted protection for wage and hour claims could also be accessible.Employers ought to focus on the brand new time beyond regulation exemption guidelines with HR, payroll/accounting, managers and supervisors. Particular wage and hour coaching also needs to be thought of. Please contact us if you want extra details about making ready for the brand new white collar time beyond regulation exemption guidelines.To obtain common updates about developments which can have an effect on your enterprise, subscribe to The Human Equation’s biweekly information temporary.