HR Insights with Ali: The New FLSA Regulations- What You Need to Know
Posted on 11/21/2016 by Ali Oromchian, Esq.
On May 18, 2016 the Department of Labor (DOL) released its new rules regarding overtime. Referred to as the “Final Rule” or the “Overtime Rule,” the new standards take effect December 1, 2016. The new standards are intended to better implement the goals behind the Fair Labor Standards Act, or FLSA, in terms of who should and who should not be exempt from receiving overtime. The biggest change of note for most healthcare practices is that the salary level for employees entitled to overtime has increased from $23,660 to $47,476 annually.
Why this change matters Simply put, these new regulations require you to pay overtime to your salaried employees who make less than $47,476 per year - meaning that you may be required to pay overtime to employees who previously were not entitled to it. In addition, even if your employees earn more than $47,476, you may still have to pay them overtime if their job is not one which entitles them to be classified as exempt. The determination of whether an employee can be considered exempt in terms of overtime depends upon his or her duties, frequency of pay, education and a number of other factors.
What you need to do First, note that responsibility for implementing the new FLSA regulations lies with you. Maintaining a record of overtime hours worked, making sure employees are paid consistently with the new laws, etc. are all changes that you are expected to make. The burden of implementing these new regulations lies with you, as the employer. Therefore, to protect your practice, you must make sure that you understand the new regulations completely and that you follow them to the letter.
Why you need to take action In order to understand where and to what extent these new regulations may leave you exposed to increased payroll expenses, you must familiarize yourself with the number of hours worked and type of activities performed by the members of your staff. Now is the time to determine how the new regulations will impact your practice’s bottom line. Worse, if you do not implement the standards correctly, you could be facing costly labor claims requiring you to pay past overtime and expensive penalties. You can minimize your burden by making these changes before December 1st and reclassifying any employees that are affected by this change.