Last week Wednesday, Attorney Dan Strader of Shumaker, Loop & Kendrick packed The Chamber Boardroom with members ready to learn about the new overtime pay rules taking effect December 1st.
A little history on FLSA
FLSA was enacted in 1938 providing federal minimum wage, 40-hour workweek, and pay at time-and-a-half for overtime hours. The law created several exemptions including “white collar” exemptions for Executive (e.g. Supervisory, Management), Administrative (e.g. HR Professionals, Insurance Adjusters), and Professional (e.g. Doctors, Lawyers, Accountants). In order to fall within one of the exemptions, an employee must meet the two-part test: Duties Test and Salary Basis. If an employee does not meet any of these exemptions (“non-exempt”), they must be paid for all hours worked plus overtime for any hours over 40 in a work week.
New Overtime Regulations Timeline
On March 13, 2014, President Obama directed the Department of Labor (DOL) to update overtime regulations which would create the first salary increase since 2004. On July 6, 2015, the DOL issued a Notice of Proposed Rulemaking and on May 18, 2016 the final rules were released with a December 1, 2016 effective date.
What’s in the new rules?
The new regulations doubled the minimum salary (Salary Bas
is) for exempt employees to $47,476 annually (or $913 per week). This means that any employees classified as exempt must meet this minimum salary requirement, in addition to the Duties Test, to continue in an exempt capacity. The new regulations also provide for automatic annual adjustment of exempt salary levels. The Duties Test did not change.
So what’s your game plan?
- Provide notice to management/ownership of issue
- Analyze your workforce and identify who will be affected
- Begin tracking hours of exempt employees at issue
- Begin tracking outside/electronic device hours of exempt employees at issue
- Consider alternatives
- Development employee messaging
For additional information, please visit the Department of Labor website.
Information in this post on the new regulations effecting FLSA comes from Daniel R. Strader, Attorney of Shumaker, Loop & Kendrick, LLP who presented to The Greater Sarasota Chamber of Commerce at a Chamber University program on Thursday, August 4, 2016.