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Final OT rule due in July, effective 60 days later

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in Human Resources,Overtime Labor Laws

If you’ve put off planning for the big overtime law changes, it’s time to take action. The final version of the U.S. Department of Labor’s revisions to the white-collar exemption rules will be released in July, said DOL’s Solicitor of Labor Patricia Smith at a conference Feb. 17.

The big news: Smith says employers will have only 60 days before the final rules take effect. The changes were first proposed in June 2015.

The DOL aims to double the salary threshold—from $23,660 to $47,892—below which qualified white-collar workers are guaranteed overtime pay. Weekly, that’s a jump from $455 up to $921. Plus, the number will change every year, based on inflation.

The result: Millions more white-collar employees will be eligible for overtime pay, many of them relatively low-paid supervisors and assistant managers.

If you work for a large enough organization, some of your employees will probably qualify for OT pay for the first time under the new regs. It’s time to start figuring out who they are and how you’re going to handle them.

You’re probably not going to double everyone’s salary to get them above the new threshold. It will, however, cost very little to give raises to employees who are already close to the $48,000 mark.

Employees whose salaries don’t come close to the $48,000 mark are in a tougher spot. You can raise the salaries of some and reclassify others as nonexempt. But who? Not every exempt works a bunch of overtime hours a week, so it’s crucial to identify how many hours those employees really work.

It may pay to reclassify as nonexempt those who work a lot of overtime. To do so, see if they meet the Fair Labor Standards Act’s duties test for their positions. Key: Set hourly pay rates for those who will be reclassified.

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Johanna Wilberding March 1, 2016 at 4:10 pm

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