Compliance issues for overtime protection

Under a proposal unveiled by the U.S. Department of Labor in July, about five million salaried workers could gain the right to overtime protections. Overtime pay and protections are governed by the Fair Labor Standards Act. According to the existing regulations, salaried employees making more than $455 per week or $23,660 per year are exempt from overtime. However, the proposed change could more than double the overtime maximum limits, with thresholds of $50,440 per year and $970 per week by possible by 2016, per the Department of Labor (though final figures will be pending passage of the rule).

The proposal – which would set the overtime maximum for most full-time workers to the equal of the 40th percentile of average earnings – would be the first change to the overtime pay rules since 2004, according to the Department of Labor.

“By way of this rulemaking, the Department seeks to update the salary level to ensure that the FLSA's intended overtime protections are fully implemented, and to simplify the identification of nonexempt employees, thus making the EAP exemption easier for employers and workers to understand,” the Department of Labor's Wage and Hour Division wrote when unveiling the proposed rule in July.

Smaller business owners should be aware of the need for compliance measures should the Department of Labor rule pass. Time must be spent re-evaluating employee and wage classifications to comply with the new regulations, which will fall in the hands of a staff that could already be busy with 1094-C and 1095-C compliance.

If you would like more information on compliance issues and how you can manage them to benefit your company, call at 847.307.6100 and speak to a Plexus professional, or visit us on the web at plexusgroupe.com.

References

United States Department of Labor. Wage and Hour Division. Retrieved from: http://www.dol.gov/whd/overtime/NPRM2015/

United States Department of Labor. Defining and Delimiting the Exemptions for Executives. (2015, July 6). Retrieved from: http://webapps.dol.gov/FederalRegister/HtmlDisplay.aspx DocId=28355&AgencyId=14