DOL Proposes New Overtime Salary
Employers may need to adjust their pay practices now that the Labor Department has issued its long-anticipated proposal to raise the salary threshold for exempt employees – a change that could make more of your employees eligible for overtime premiums. The U.S. Department of Labor (DOL) announced on August 30, 2023 that it intends to significantly raise the exempt salary threshold from $684 per week to $1,059, meaning employees would need to earn $55,068 or more per year to be exempt from OT pay. An estimated 3.6 million U.S. workers would become eligible for overtime pay under the proposed rule.
Although it’s just a proposal at this point, we expect the DOL to prioritize this rule and move swiftly through the notice and comment period. In the meantime, you should start preparing for what could be big changes to your compensation plans.
DOL’s proposal also would increase the total annual compensation requirement for highly compensated employees to $143,988 per year. The proposal outlines an automatic update provision for future overtime thresholds beyond what is included in the proposed rule and would not make changes to the FLSA’s “duties test” for determining overtime eligibility. Once published in the Federal Register, the proposal will be subject to a 60-day public comment period.
Once the comment period closes, the agency is required to take each comment into account and then determine whether to adjust the proposed rule before it becomes final. This course could take several months, although we expect the DOL to fast track the process given the importance of this rule. The agency will then issue a final rule taking the comments into account, and it will then take effect within a few weeks of the final proposal being issued.
What You will Learn
- What the new DOL proposal includes and who it would impact more.
- How long Employers have to make changes.
- How Employers can proactively impact the proposed decision.
- What communication details can effectively and positively impact newly non-exempt employees.
- How job responsibilities determine classification not job titles.
- How to comply without the risk of a decrease in staff morale, increase in turnover, decrease in retention and removing benefits.
- How the automatic updates in salary threshold according to the consumer price index (CPI) can impact ongoing budget losses.
- How employers should confirm the duties tests before making negative decisions.
- How the Executive Exemption, Administrative Exemption, and Professional Exemptions can confuse the Employer's judgment on exempt and nonexempt employees.
What We will Discuss
- How Employers can use the Fair Labor Standards Act to prepare for identifying the proper compliance guidelines.
- How timekeeping procedures, off the clock work policies and recordkeeping, and overtime approval policies can impact compliance of FLSA requirements.
- How Employers need to determine proper classification of employees or risk fines and penalties.
- What resources Employers can use to mitigate the negative response by employees.
- What Employers need to do to determine how state overtime regulations impact federal regulations and which supersedes.
Why You Should Attend
Although the announcement indicates a proposal, Employers should learn that the previous overtime increase created severe complications regarding communications to impacted employees, a decrease in staff morale for those who believed that it was a demotion, loss of benefits when they decided to reduce hours and costs, challenges with job descriptions and expected impact in Employer’s budget. It led to an increase in turnover and decrease in retention.
Employers can take the time to review and prepare for setting guidelines on how they communicate the impact to employees, make effective decisions on how to cut costs without reducing employee hours or benefits and develop a training program for managers and newly non-exempt employees.
Who will Benefit
- All Employers
- Business Owners
- Company Leadership
- Compliance professionals
- Payroll Administrators
- HR Professionals
- Employers in all industries
- Small Business Owners
Margie Faulk is a senior level human resources professional with over 15 years of HR management and compliance experience. A current Compliance Advisor for HR Compliance Solutions, LLC, Margie, has worked as an HR Compliance advisor for major corporations and small businesses in the small, large, private, public, Non-profit sectors and International compliance.
Margie has provided small to large businesses with risk management strategies that protect companies and reduces potential workplace fines and penalties from violation of employment regulations. Margie is bilingual (Spanish) fluent and Bi-cultural.
Margie’s area of expertise includes Criminal Background Screening Policies and auditing, I-9 document correction and storage compliance, Immigration compliance, employee handbook development, policy development, sexual harassment investigations/certified training, SOX regulations, payroll compliance, compliance consulting, monitoring US-based federal, state and local regulations, employee relations issues, internal investigations, HR management, compliance consulting, internal/external audits, and performance management.
Margie’s unique training philosophy includes providing free customized tools for all attendees. These tools are customized and have been proven to be part an effective risk management strategy. Some of the customized tools include the I-9 Self Audit. Correction and Storage program, Ban the Box Decision Matrix Policy that Employers can provide in a dispute for allegations, Family Medical Leave Act (FMLA) Compliance Guide, Drug-Free Workplace Volatile Termination E-Book and other compliance program tools when attendees register and attend Margie’s trainings.
Margie holds professional human resources certification (PHR) from the HR Certification Institution (HRCI) and SHRM-CP certification from the Society for Human Resources Management. Margie is a member of the Society of Corporate Compliance & Ethics (SCCE).
Compliancevent is recognized by SHRM to offer Professional Development Credits (PDCs) for the SHRM-CPSM or SHRM-SCPSM. This program is valid for 1.5 PDCs for the SHRM-CPSM or SHRM-SCPSM. For more information about certification or recertification, please visit - portal.shrm.org.
This webinar has been approved for 1.5 HR (General) re-certification credit hours toward California, GPHR, HRBP, HRMP, PHR, and SPHR recertification through the HR Certification Institute.
The use of this seal is not an endorsement by the HR Certification Institute of the quality of the activity. It means that this activity has met the HR Certification Institute’s criteria to be pre-approved for re-certification credit.