Winter Storm On The Horizon? New FSLA Overtime Rule January 1, 2020
Here we are at year end again. There’s a cluster of new laws that go into effect next month, but the biggest on the federal level is Fair Labor Standards Act ‘Overtime Rule’ which makes 1.3 million American workers newly eligible for overtime. The ‘Overtime Rule’ is a simple concept and has been sold as a benefit for the middle class – but if you are not ready for the change, it’s an unexpected dent in your labor budget. The Overtime Rule is an increase in the federally mandated minimum wage threshold for salaried employees. The ‘Overtime Rule’ updates the earning level necessary to exempt executive, administrative or professional employees from overtime requirements. The ‘Overtime Rule’ raises the standard salary threshold from the current level $455 to $684 per week, (or $35,568 annually). The Overtime Rule also allows employers to include up to 10% of the employee’s salary using nondiscretionary bonuses and incentive payments, (including commissions) toward the standard salary threshold. Of course, special rules apply when using anything other than ‘regular’ pay. Failure to meet the new standard salary threshold will result in your salaried employee going from ‘exempt from overtime’ to non-exempt, hourly, and eligible for overtime pay over 40 hours worked in a workweek. You can bet that at over half of your employees already know something about the new ‘Overtime Law’, waiting for a rate increase. So, are you prepared for this storm? There’re several cost-savings strategies that can be used to keep your business in compliance with the new law without losing your shirt. Your job as a business owner is to learn what they are and apply the strategy that makes the best sense for your company. Our Payroll Team at CEOHR, Inc. apply compliant, cost saving strategies to meet our clients’ needs every day. As a result, our clients are ready for the new ‘Overtime Rule’. So, I ask again…are you prepared for this change? If not, keep a weather eye on the horizon – the storm is coming. For more information about utilizing compliant strategies to handle ‘The Overtime Rule’, give our HR team a call (941) 907-4520 or email CEOHR at email@example.com.
Cindy Laviolette, PHR, SHRM-CP, HRBP is Vice President of Human Resources for CEOHR, Inc.