Neither the salary basis nor the salary level test applies to certain employees . And the current rules provide a more relaxed duties test for certain highly compensated employees who are paid total annual compensation of at least $100,000 and at least $455 salary per week. They need only regularly perform one of the primary duties required for the executive, administrative or professional exemption. The rule also establishes a mechanism to automatically update the salary and compensation levels every three years, beginning on January 1, 2020. The DOL will publish all updated rates on their website as well as in the Federal Register at least 150 days before their effective date.The new rule does not include any changes to the job duties test.

Virgin Islands, Guam, and the Commonwealth of the Northern Mariana Islands. It is also maintaining a special base rate threshold for employees in the motion picture producing industry and has set the new base rate at $1,043 per week or a proportionate amount based on the number of days worked. Calculate Overtime Pay – Determine if overtime pay for current nonexempt employees has been properly calculated. As these considerations illustrate, the changes ushered in by the final rule present employers with challenging compensation decisions. Thankfully, employers have several months to evaluate the relevant considerations and carefully make these decision before the effective date of the final rule. If you need assistance in complying with the final rule or evaluating your various compliance options, please contact any one of our labor and employment attorneys.

Overtime Exemption Rule Changes

Or you might want to redistribute workloads or scheduled Catch On To New Overtime Rules For Your Compliance Plans to prevent newly nonexempt employees from working overtime. At the surface level, it may seem that a good payroll system is all about paying employees on time. From choosing a payroll schedule, to calculating wages and taxes, to ensuring payroll compliance with labor laws, organizations must ensure every aspect of their payroll is accurate and completed on time. A good first step is to check employees’ salary levels against the new thresholds.

• Employers should create a plan for each employee that falls under this category, since they could now technically qualify for overtime pay.
• If employees are performing work that is substantially similar, they must be paid equally, regardless of their sex, race or ethnitcity.
• Evaluating Health Benefits – Higher overtime costs could make it more likely that ancillary benefits, such as dental, vision and disability insurance, are converted from company-provided to voluntary benefits.
• The long expected changes by the Department of Labor with regard to the “overtime rule” will take effect on January 1, 2020.
• In fact, twenty-one states have filed a lawsuit challenging the Department of Labor’s new overtime rule, citing that the new rule will force many businesses to unfairly increase employment costs.

Recipients of state, federal or local government funding or project-specific grants may be contractually obligated to maintain services at a predetermined level. The new overtime regulations could result in increased costs not covered under existing grants or cost-reimbursement contracts. Review the terms and conditions of these contracts carefully to understand, identify and proactively address potential compliance issues and budget implications. Review employee workloads to ensure you know who is working how many hours, and when. Don’t forget to include weekend work or seasonal fluctuations in your documentation! For example, fundraising organizations frequently hold special events in evenings or on weekends, and staff work extra hours during the holiday giving season.

Why Your Overtime Expansion Plan Is Worth a Second Look

https://adprun.net/ should create a plan for each employee that falls under this category, since they could now technically qualify for overtime pay. Each employee could require a different plan based on their role, salary, classification and the number of hours they work. In addition, under the FLSA, teachers, lawyers and doctors can qualify as exempt professionals without having to meet any minimum salary. Under Pennsylvania’s rules, however, these professionals must meet the minimum salary threshold. Nondiscretionary bonuses and incentive payments made to nonexempt employees must be included in the regular rate of pay when calculating overtime, so employers must be sure that their employees are properly classified.

To claim the highly compensated employee exemption under the final rule, employers must pay employees at least the minimum salary (now $913 per week) on a salary or fee basis. The Obama administration made boosting the wages of U.S. workers a priority, not only through proposing an increase in minimum wage but also through modification of overtime rules. The DOL’s proposed changes to the FLSA would raise the threshold of overtime exemption from $23,600 annually to $50,440 annually.

Aside from salary, can any other payments be counted toward the new $684 weekly salary threshold?

As with any payroll tax compliance issue, the organization can attract stiff fines and penalties if they fail to report taxes accurately. There are a few common payroll compliance mistakes that employers are known to make. Examining these mistakes and understanding how they occur is a necessary step to avoid repeating the same errors in your organization.

In addition to the federal regulations, employers must also be aware of state regulations for payroll compliance. As one would expect, these requirements can vary from state to state. If your organization operates in multiple states, you must fulfill the payroll compliance requirements for each state individually. Typically, state laws require organizations to withhold income taxes for the state, report new hires, and follow minimum wage and overtime regulations. One of the most important payroll compliance requirements outlined in FLSA is that of overtime pay.

With Paycom’s Labor Allocation tool, businesses can find the most cost-effective plan for their unique situations. This, combined with powerful human capital technology such as documents and checklists, time and labor management and training tools, can help you lessen the impact overtime expansion has on your business and your people. As the compliance deadline for the new overtime rule draws near, states are growing apprehensive of the rule’s sweeping impact. In fact, in September, 2016, 21 states came together to file a lawsuit against the Department of Labor. But, because the salary threshold’s increase is so dramatic, the law is complicated and the consequences of noncompliance can be devastating, many businesses could require huge changes to stay in line. Once the institution has segmented its client population into the appropriate risk levels, it must apply the measures according to the thresholds established by its own standard.