A change to the Fair Labor Standards Act (FLSA) is set to take effect December 1st, 2016 which will make an estimated 4.2 million additional salaried American workers eligible to earn overtime pay. The new rule will increase the federal minimum salary level for overtime pay for FLSA-covered workers to $913 per week, or $47,476 per year. While many companies have already commenced preparations for this change following its announcement this past spring, it is important that all employers be aware of this update and take the necessary steps to ensure compliance.
To ensure your company is ready for this change, consider the following tips:
- Examine the impact ahead of time: Payroll is frequently the largest cost for most businesses. As such, companies need to know the number of employees that this change will affect once it is implemented by reviewing salaries and job descriptions.
- Consider upgrading time-tracking procedures: By far one of the most effective ways for companies to prepare for this upcoming change is to employ electronic time-tracking systems as a means of managing complex timekeeping scenarios. Systems that implement mobile applications that allow workers to clock in and out are often most effective and can allow employers to see real-time status reports on hours worked, helping to avoid payroll surprises.
- Review overtime rules: If your employees are currently allowed to work overtime as they please, you may want to consider updating your company policies. Systems which require workers to obtain written permission from a supervisor prior to working overtime can be effective ways to save on payroll costs. It is important to note, however, that employees who work overtime when an employer knew or should have known must be paid, though they may still face discipline.
- Speak with employees: Identify affected employees and clearly inform them of any changes that will be implemented, addressing any concerns that may arise.
- Consider adjusting salaries: Depending on the circumstances, it may make more sense to increase a worker’s pay to the cap limit to avoid timekeeping complexities. Increasing an employee’s pay may not be enough to guarantee that they will be exempt from overtime, however, as certain “duties tests” must be met before an exemption applies.
Houston Employment Lawyer
At Shellist Lazarz Slopin LLP, our Houston employment law attorneys have more than a century’s worth of combined legal experience helping employers stay continually up to date with changing wage and hour regulations. If you are unsure how this change will affect your business or are facing an overtime-related dispute, our advocates can provide the advocacy you need to ensure your best interests are guarded. To discover your legal options in detail, call our office today at (713) 352-3433.