September 4, 2015 is the last day to submit your opinion on the proposed overhaul of FLSA overtime. The Department of Labor has proposed revising the FLSA, extending overtime protections to nearly 5 million white collar workers. Under the proposal, salaried managers earning less than $50,440 per year would now be eligible for overtime. The intended group expected to benefit from the changes include occupations as diverse as graphic designers, assistant store managers, fast-food managers, and business analysts. The proposed new rule more than doubles the salary test for those eligible to earn overtime from the current $445.00 per week ($23,660.00 per year), to $970.00 per week, ($50,440.00 per year). Also being proposed is to increase the total annual compensation for highly compensated employees from $100,000.00 per year to $122,148.00 per year. Both new rates would be updated annually.
With only 2 days left to submit comments, the Department of Labor form is simple and fast to use, even though I believe it is a foregone conclusion the proposal will be passed and implemented in 2016. The wage threshold has not been increased since 1975 and there is no doubt it needs to be fixed. However, incremental increases over the years would have been easier to tolerate for employers.
The rules won’t be finalized until 2016, but employers are already looking for ways to comply with the law while keeping a lid on labor costs. A few basic ideas to accomplish this is:
- for employers to review their time clocks and time tracking software systems to help avoid workers running up overtime;
- carefully review job descriptions and where appropriate consider switching salaried employees to hourly employees; and
- one last idea is for employers to review their policies and insist employees not check email or return phone calls while they are off work.
While tracking employee work time has always been important, it is now even a bigger concern for employers. Get ready, I predict big changes in overtime coming your way.