Bomb Cyclone – in Form of FLSA Regulations – to Hit US Employers

Bomb cyclone mapWhile many organizations in the central region of the United States were making preparations for the Bomb Cyclone that was about to hit them – in the form of high winds, rain, and snow – businesses across the nation were staring down some seismic shifts in FLSA regulations.

You might not need to wear Canada Goose for these changes, but your organization will definitely spend time shoveling out from under the changes, especially if you’re not putting in some effort to prepare up front. (Salting your driveway kind of thing, if we’re going to continue straining the metaphor! I need to bend at the knees to keep this up…)

What’s the impact going to be? Well, with an increase of the salary threshold to $35,508 annually, over one million workers will be eligible for overtime if this rule passes. The DOL estimates it will transfer about $400 million from US employers to their workers each year for the next 10 years.

The predictions are that something will pass, whether it’s this exact rule or in a modified form. Assuming nothing will change would be naïve.

So what should you do now to prepare?

  • Review your employees’ compensation structure now, and identify who would be eligible for overtime with the proposed regulations.
  • Determine which positions could be made exempt based on the job duties test.shoveling money

Assess your options:

  • Is it better to raise their salaries to the threshold to avoid paying overtime?
  • Would adding overtime to their current salaries be a better option?
  • Do you need to hire more personnel to absorb the potential overtime costs?

It’s not just a financial decision. Factoring in morale and the impact to employees is important too. Knowing your workforce is a crucial component of finalizing your decisions.

We’re now in a 60 day comment period, and the rule that comes out at the end of that time may look very different than what we see here today. But it’s almost a given that a change to the FLSA regulations is coming. With proper preparation and planning, this regulatory “bomb cyclone” can be handled with ease.

Get yourself prepared. C4CM is offering New Overtime Rules: What Employers Need to Know Now to Navigate the Complex Changes Proposed by the DOL, a webinar designed to help you prepare for and absorb the impact of any changes to the FLSA regulations.

-Tina Nacrelli

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