Case Study: Preparing for the Proposed DOL Overtime Exemption Changes
proposed flsa changes

Case Study: Preparing for the Proposed DOL Overtime Exemption Changes

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.

Background

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.

Problem

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.

Solution

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.

  1. Employee name
  2. Job title
  3. Annual salary
  4. Hours worked per week
  5. 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:

  1. Increase the salaries for those under the threshold to the new threshold and keep them exempt.
  2. Move employees under the threshold to non-exempt and keep those over the threshold exempt.
  3. Move all employees to non-exempt.

Step 3: Begin tracking hours for employees who may be reclassified.

  1. Helps better estimate the hours of overtime employees have worked.
  2. Create a tracking template for managers to use to help ease the burden.
  3. 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.

  1. 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.
  2. 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.

  1. 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.
  2. 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.
  3. Begin developing broader communication plans within your organization.

Step 6: Consult legal counsel to help you administer potential changes.

  1. What and how to communicate changes.
  2. 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.



Subscribe to Our Resource Center Digest

Enter your email below to receive a weekly recap of the latest articles from Paycor's Resource Center.

Check your inbox for an email confirming your subscription. Enjoy!

More to Discover

What are Supplemental Unemployment Benefits?

What are Supplemental Unemployment Benefits?

Reductions in force are unavoidable in economic downturns, but are traditional severance packages the way to go? They can be a big hit to your company’s cash flow and are subject to payroll taxes. The tax-friendlier option, Supplement Unemployment Benefits plans (SUBS), can spread out costs and deliver the same value for the employee, too. How Do Supplemental Unemployment Benefits Plans Work? SUBs got popular in the ‘50s as a way to help workers in industries with cyclical employment patterns get a more steady income. SUBs were often fought for in collective bargaining agreements. They’re growing in popularity again across industries. Under a SUB plan, in the event of a Reduction in Force (RIF) or temporary unemployment due to training,...

Take Our HR Benchmarking Quizzes

Take Our HR Benchmarking Quizzes

Paycor's research shows that 75% of high-functioning HR teams spend their time on mastering key pillars of HR excellence. Want to know how your team stacks up against others? Take our benchmarking quizzes to find out and get customized action plans based on your results. Recruiting Benchmark Quiz Benefits Benchmark Quiz Labor Costs Benchmark Quiz People Management Benchmark Quiz Compliance Benchmark Quiz

Remote Work Policy - Information Security Template

Remote Work Policy - Information Security Template

To make remote work successful, HR needs to think through risk mitigation policies, especially if it’s new to your organization. One of the biggest issues to consider is information security. It’s important that your remote workers know what to do in case of a security breach or data loss. Download Remote Work Information Security Policy Template Why Information Security is Important for a Virtual Workforce Protecting your company’s data (and the data of your clients) is hard enough when everyone’s working in the same office. It gets more difficult in a distributed, virtual environment. When an employee is offered the opportunity to work remotely, you may want them to sign an initial work from home agreement covering the general...

COVID-19 ADA Requirements

COVID-19 ADA Requirements

UPDATE JUNE 22: Updated EEOC guidance states that “requiring antibody testing before allowing employees to re-enter the workplace is not allowed under the ADA”. What is the ADA? The Americans with Disabilities Act (ADA) is a federal law that provides protection to disabled workers. The ADA prohibits employers from discriminating against employees on the basis of a physical or mental disability. This legislation applies to any business with at least 15 employees and prohibits discrimination against those with disabilities in all aspects of employment. How does the Coronavirus pandemic impact ADA compliance? Short answer, we don’t know yet. The Americans with Disabilities Act (ADA): The Basics The ADA broadly prohibits discrimination in...