Plan Ahead for Changes to Overtime Pay Rules

1428638_61478545It’s been about six months since the Department of Labor’s (DOL’s) Wage and Hour Division issued its proposed updated on overtime rules. Specifically, the agency has suggested revisions to the definition of which employees are exempt from overtime pay requirements and which are not (referred to as the “white collar exemption”).

the proposal elicited 264,093 responses during the two-month comment period. There’s no way to know how much, if any, of this feedback will find its way into the final rules, which should go into effect sometime next year. So it’s prudent to plan ahead.

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New Proposed Overtime Rule Released by the Department of Labor

clock-334117_1280The Wage and Hour Division of the Department of Labor (DOL) has recently released proposed changes to the salary threshold for overtime exemption.  Under the current Fair Labor Standards Act (FLSA), in order for an employee to be considered “exempt” (meaning they are not required to be paid overtime for working more than 40 hours per week) the employee must be paid a salary of at least $455 per week.  The new proposed rule would increase this salary figure to approximately $970 per week, or $50,440 per year. The new figure was set at the 40th percentile of current exempt salary employees.  The proposed rule also states that the salary threshold would be adjusted annually based on the 40th percentile of wages paid each year.

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Company Payroll Policy for Overtime

time-371226_1280It seems like overtime issues never cease… if it isn’t one thing, it’s another.  But with money, productivity and safety at stake, it’s too important to just wing it.  That’s why — aside from the obvious issues of when to pay time-and-a-half, when to pay double time, and who qualifies for the higher rates — your company needs a well thought out payroll policy to address other overtime factors.

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Home Care Workers: Delayed Enforcement of Wage, Overtime Rules

clock-611619_1280The Department of Labor’s Wage and Hour Division recently announced that it will delay enforcement of certain rules pertaining to home care workers.  These “direct care workers” provide home care services and include certified nursing assistants, home health aides, personal care aides, caregivers and companions.

For six months, the Department of Labor (DOL) will not bring enforcement actions against employers for violations of obligations resulting from amended regulations announced released last year.

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Guarding Against Unauthorized Overtime

locks-332093_1280An employer is frustrated because employees are working overtime and ignoring the employer’s request not to do so.  Here’s how the employer describes the situation:

Q. “I have a recurring problem regarding employees working overtime.  Some employees will arrive early, stay late or maybe take a short lunch break.  I have told them I do not want them to work more than 40 hours.

“I even issued a memo telling my employees unless overtime was authorized in advance it would not be paid.  Nothing keeps this problem from reoccurring.  The surprising part is, the employees who do this are some of my best employees.  How do I avoid this unwanted overtime?”

A. Top notch employees are among the most frequent abusers of overtime, working overtime without pay.

Their dedication may seem commendable, but never allow employees to perform work without paying them.  Never allow non-exempt employees to perform overtime work without paying them overtime pay.

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Clear Overtime Policy Saves Money

1428646_66849787It’s not enough to have a one-sentence statement in your employee handbook that merely tells your employees something like this: “All time worked beyond 40 hours in a workweek will be compensated at one-and-one-half times your regular hourly rate of pay.”  It’s not enough if you want to cut and control employee costs associated with overtime pay and exercise your employer rights at the same time.

Following are some things to consider to develop a clear and specific overtime policy:

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Avoid the Overtime Backlash

1428647_14578464When companies depend on mandatory overtime, they must try to minimize the stress and disruptions it causes in their workers’ lives.  Studies show that as overtime is extended, productivity can drop anywhere from 10 percent to 50 percent.

So regular overtime can become very expensive when you add in the costs of redoing work and the increased compensation cost.

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Can we require an employee to work overtime?

person-246239_1280No and yes. No, if at the time of hiring you and the employee agreed that the employee would not be required to work overtime. Yes, if working overtime is the accepted norm for the job and the employee understands this when hired. To be sure, put this requirement in your written work rules, policies or job description. And be sure the employee agrees to this requirement at the time of hiring.

Question and Answers About Overtime

road-sign-63983_1280The federal rules governing overtime seem to grow more complicated every year. To know who is entitled to overtime pay and who is exempt from it under federal wage and hour laws requires close examination. Here are answers to questions you might have about how the current rules apply to your business. Continue reading

Questions Surrounding Payroll Never End

man-96587_1280Just when you think you understand the rules surrounding payroll and employees, new questions arise. Here are two issues addressed by the Department of Labor (DOL) that may help clarify this complex area.

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