Have You Talked to Your Employees Yet?
Have you talked to your employees yet about the OVERTIME law that changes on December 1? Yes, I am referring to the Department of Labor’s (“DOL”) new overtime rule that increases the overtime exemption threshold from $23,660 to $47,467 – nearly doubling the previous threshold. Time is running out and I am afraid that most of you are ignoring the warnings. You need to listen because this new overtime law affects all of you who have employees! The deadline to comply with the DOL’s new Fair Labor Standards Act regulations is exactly 17 days away. It’s time to get serious. You have had six months to prepare and these overtime regulations are not going away anytime soon.
PERFORM A SELF AUDIT ON PAY PRACTICES
Most employers choose to pay an employee salary because its keeps things simple especially for those employees who don’t want to worry about tracking their time. Take note that to be salaried-exempt (no overtime) going forward, certain criteria is required:
- The employee must be paid on a regular salary basis, with the requirement that the pay not be reduced based on quality or quantity of work and must be paid even if no work is available.
- The salary must be no less than $47,476.
- The employee must also meet the required job duties under these 5 job categories: Executive, Professional, Computer, Administrative, and Outside Sales.
APPROACH CONVERSATIONS INDIVIDUALLY
Another reason to take action now is because Utah law requires that employers give notice to an employee whose wages may be changed prior to the actual change. Thus, if you decide that a certain employees’ hourly will be reduced to compensate for the required overtime, you are obligated to notify the employee BEFORE December 1, 2016. Its time to have those conversations so your employees understand why you are changing their pay rate, or if you are requiring no more overtime. Each person will react differently and do not underestimate the value of communicating directly with each individual employee who will be affected by your changes.
Change opens the door to mistakes and legal action. As you make these overtime changes and talk with your employees, make sure you document what you discussed, the date, and who was involved in the conversation. Arming yourself with correct and accessible records is one of the best ways to protect your business. Also, keep records of employees’ hours for at least 3 years in case a dispute arises. The statute of limitations is 2 years but the DOL can go back up to 3 years for willful violations.
THANKSGIVING IS A PERFECT TIME TO IMPLEMENT
Experts suggest that you do not wait until December 1st but actually implement this overtime changes over Thanksgiving to avoid an administrative nightmare. Here’s why: This year, December 1 falls on a Thursday which means, if you make changes that same day, your reclassified employees will be exempt for half of the week, and nonexempt for the other half. Good luck processing payroll! However, due to the holiday, its unlikely newly classified employees will be working overtime that week, which can make the transition much easier and less expensive.
Check this post for more details about your obligations under this new law: http://www.danaballlaw.com/new-overtime-rule-applies/
I encourage you to act fast and heed these warnings!