The U.S. Department of Labor (DOL) has proposed changes to the Fair Labor Standards Act (FLSA) overtime rules. The proposal seeks to raise the salary threshold to $35,308 or $679 per week. The rule, if it becomes final, is anticipated to go into effect on January 1, 2020.
There is much good news in this ruling. Unlike previous rulings, nondiscretionary bonuses may be considered as part of the salary base in this new ruling. Also, unlike the 2016 ruling, there are no automatic increases to this amount.
If you have not put a plan in place, now is the time. Can you answer the questions below?
Now is the time to revisit your options. If you are considering reclassifying employees and changing compensation for hours worked, you will still have time to get ahead of the new regulation.
There are a number of things to take into consideration when it comes to mandated salary increases. First, is the classification of your employees. Are you sure that your salaried employees actually meet the job criteria of the position? The FLSA offers very clear details on what defines a “salaried” employee. Check these carefully to ensure you have everyone classified correctly.
When the previous ruling seemed imminent, we worked with a client that thought they had everything under control. After examining the solutions they prepared for their five-member payroll, we were able to propose an alternative option that saved $16,000 a year. It’s easy to make mistakes if you aren’t aware of all the implications a proposed new rule could have on your individual situation.
The HORNE team knows that this task can be daunting, but if you start planning now, you can make the best choices for your business. We’ve broken the process down into three steps to help you take control:
There are numerous options to consider related to compensation and possible staffing changes. Each solution has pros and cons, and you must determine what’s best for your business.
If you’d like to discuss your situation with our experienced team, please give us a call.
We are continually monitoring the situation and will keep you up-to-date on any regulation changes.