Where did the summer go? As of Sept. 1, you have just three months to begin complying with the Department of Labor’s new rules for paying white-collar overtime.
Here’s what you need to do—now!
- Review all exempt positions. Using job titles, list weekly salary for all exempt incumbents.
Make two lists: One showing employees making less than the new salary threshold of $47,476 per year ($913 per week), the other listing those who make more.
- Decide on pay increases. Raising pay above the salary threshold retains exempt status. Remember, however, that pay alone doesn’t define exempt status. Job duties are what matter.
- Decide if you will use a bonus credit. The DOL is changing the regulations to allow nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10% of the standard salary test requirement.
Such bonuses include, for example, nondiscretionary incentive bonuses tied to productivity or profitability.
To credit bonuses toward the salary limit, they must be paid on a quarterly or more frequent basis.
- Announce changes. By Oct. 1, announce any pay and bonus plan changes. That’s just a month away! Schedule group or individual meetings to ex-plain any pay and bonus plan changes to affected employees, as well as any new timekeeping requirements.
Why such early notice? Employees deserve time to make plans around any compensation changes they may experience. Plus, many states require employers to provide at least 14 days’ notice (and as many as 30 days’ notice) of any pay reductions.
For more details, plus tips on making the change and a checklist to help you decide who is now OT-eligible, go to TheHRSpecialist.com/overtime2016.