Case Study: Preparing for the Proposed DOL Overtime Exemption ChangesPosted on December 14, 2015
Managing people is hard, and things just got harder with proposed regulatory changes from the Department of Labor. Stay informed and help your organization prepare by partnering with Paycor. Our team of experts is monitoring the potential impact of the proposed new regulations and developing solutions to not only assist our partners, but prepare our own business for this impending rule changes. Let’s learn more about the steps Paycor is taking to prepare.
The Department of Labor is currently working to update the Fair Labor Standards Act’s white collar overtime exemption rule. The proposed change will increase the number of non-exempt workers and spread hours of work over more employees.
The proposed regulations will increase the standard salary threshold for overtime exemptions to $47,476 per year and offer overtime protections to nearly 5 million more workers. Many organizations will be forced to adjust their compensation plans and determine how they will cover costs in order to comply with final regulations.
Paycor is taking specific steps to prepare for the upcoming changes and we’re offering recommendations that your organization can institute as the proposed regulations become final.
Step 1: Identify all employees classified as salaried exempt who earn less than $47,476/year. To capture all employees who fit this classification, we are gathering the following details and determining how these classifications will impact our business.
- Employee name
- Job title
- Annual salary
- Hours worked per week
- Employee type – full-time or part-time
Step 2: Review the jobs that the impacted employees are in and identify the number of employees who fall under or over the threshold. For employees that fall below the threshold, we will consider the following actions:
- Increase the salaries for those under the threshold to the new threshold and keep them exempt.
- Move employees under the threshold to non-exempt and keep those over the threshold exempt.
- Move all employees to non-exempt.
Step 3: Begin tracking hours for employees who may be reclassified.
- Helps better estimate the hours of overtime employees have worked.
- Create a tracking template for managers to use to help ease the burden.
- Consider busier times of year that employees may work more overtime – like month-end, quarter-end, year-end—especially if these time frames are not captured in your tracking window.
Step 4: Consider current standards and policies that may need to change for the reclassified employees.
- Do the employees have laptops that they take home with them to work after hours or on the weekends? All time worked for non-exempt employees must be tracked and paid.
- Do the employees check company emails on mobile devices? You will likely need to monitor this use when the proposed regulations are implemented.
Step 5: Communicate possible changes to employees to prepare them for the potential impact.
- Be transparent about the current state of the regulations; it’s public knowledge. Let the employees potentially impacted know that there is a chance they may be reclassified to non-exempt.
- Train managers prior to the communications so they can be prepared to answer employee questions and have employees assist in tracking their own hours as some employees may have to work from home after hours and on the weekends.
- Begin developing broader communication plans within your organization.
Step 6: Consult legal counsel to help you administer potential changes.
- What and how to communicate changes.
- What industry standards need to change?
How Paycor Can Help
Let Paycor help your organization prepare for the Department of Labor’s changes. Turn to our DOL overtime changes resource page or 7 Steps Guide for the information and answers you need, or click here to speak to us in person.
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