Department of Labor Proposal for New Federal Overtime Rule
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The public will be able
to comment on the
overtime regulation
proposal once the
Notice of Proposed
Rulemaking is issued.
It’s important for the
DOL to know the impact
this kind of change
will have on employers
across the country.
costs. To help ensure a smooth transition if
and when the regulations are approved, it’s
crucial to develop a strategy to prepare your
business and to control overtime expenses.
Once implemented, you’ll have to review
your internal operations and employee
classifications. To prepare, consider doing
the following:
• Review salary levels: Review your em-
ployees’ salary levels to confirm you are
complying with current federal regulations.
• Reclassify employees’ statuses: Tran-
sitioning your exempt employees to
non-exempt status shouldn’t be too
difficult. However, the change from ex-
empt to non-exempt status may affect
employee morale, change their benefits,
raise costs, and alter your recordkeeping
processes. Be prepared for all possible
scenarios.
• Raise employee salaries: If certain
employees become eligible for overtime,
it might make sense to simply increase
their salaries. This particular strategy
can be used on employees who make
less than the proposed salary threshold,
work more than 40 hours per
week and have been ex-
empt from overtime
prior to the rule
change. To
imple-
ment this approach, all you have to do is
increase your employees’ salaries enough
to reach the exemption threshold. However,
before forging ahead with this method, do a
little research to find out if it’s actually your
most cost-effective option.
• Change hiring strategy: If most of your
employees become non-exempt from the
new regulations, you could look into hiring
more employees or restructure the work-
load of current employees to avoid overtime
situations.
Depending on your business and the strategies
you choose to deploy, these regulations could
either help you or hurt you – which is why you
should carefully analyze the effects any adjust-
ments would have on your business.
For now, you have plenty of time to prepare
and strategize. Just be sure to use this time
wisely and prepare for when regulations will
take effect.
Feedback Is Welcome
The public will be able to comment on the
overtime regulation proposal once the Notice
of Proposed Rulemaking is issued. It’s impor-
tant for the DOL to know the impact this kind
of change will have on employers across the
country. This feedback will help the department
as it seeks to come to a conclusion on this mat-
ter. The DOL will notify us when the proposal is
live and public feedback is being sought.
If you have any questions about the proposed
federal overtime regulation or what your op-
tions are, talk to your human resources
professional or email me.
Disclaimer: The HR Consulting services
are based on the best knowledge of non-
attorney specialists at Rea & Associates, Inc.
Rea does not provide legal advice. You are
encouraged to consult with legal counsel
of your choice prior to implementing
policies or procedures.