The United States Department of Labor recently made significant changes to the regulations concerning overtime pay for certain employees, which will become effective on December 1, 2016. This week’s article, the final installment in our series, examines the steps employers can take to prepare for the changes to the FLSA Regulations.
Before the new regulations go into effect on December 1, 2016, employers should speak to their managers, accountants, and payroll companies to determine what, if any, effect the Final Rule will have on employee pay. If it appears that employee pay will be affected by these changes, employers should make arrangements to ensure that workers who will no longer be exempt will receive time and one half pay for work over 40 hours per week.
In the event an employer seeks to avoid payment of overtime, the employer may consider simply raising employee salary to exceed the new $913.00/week threshold for exemption, if the employees would otherwise qualify pursuant to one of the exemptions. (For more information concerning those exemptions, please refer to our earlier blog posts on this topic). That way, the employee would “fail” the Salary Test and would not be entitled to earn overtime pay. In the alternative, the employer could simply limit workers to 40 hour of work per week, so there is no chance that employees work enough hours to be eligible for overtime.
No matter what you choose to do, you must ensure that your company pays employees any overtime wages that are properly earned. Failure to pay overtime in compliance with the FLSA and applicable regulations can subject employers to significant penalties and liability.
If you have questions about the upcoming changes to the FLSA regulations, or about any other employment law issues, please contact Attorney Michael P. Doherty, Andrew M. Kepple or one of our other employment attorneys at 508 541-3000.