Changes to the FLSA and Employer's Payroll Budgets
As if preparing for your 2017 compensation plan was not enough, on May 18, 2016 the Department of Labor’s published its official rules regarding its 2015 proposal to amend the Fair Labor Standards Act (FLSA.) The rules take effect on December 1, 2016 and employers must prepare for these final rules. Under the new regulations, any employee who is paid less than $47,476 per year will be entitled to overtime pay. It critical employers plan now what they will do in December to avoid escalating payroll costs. Because of these rules, the DOL’s Wage and Hour Divisions estimates that 10.9 million workers will no longer qualify as exempt and almost 5.0 million workers will become entitled to overtime with other experts estimating those numbers as much higher.
The DOL’s position for these rule changes was that, “Failure to update the overtime regulations has left an exception to overtime eligibility originally meant for highly-compensated executive, administrative, and professional employees now applying to workers earning as little as $23,660 a year.”
There is one certain takeaway. The regulations will mean higher salaries for most exempt employees, even those who are highly compensated. Employers will be faced with choosing to pay some currently exempt employees overtime vs. hiring more people vs. giving some employees sizable raises. Additionally these changes will likely cause some instability in the integrity of compensation data in the near future.
Employers should start planning today for how they will implement what will certainly be some of the biggest changes ever to the FLSA. These regulations will affect even high paying employers in skilled industries with few non-exempt employees. However for some employers they also need to begin planning for what, is not just a change to their salary budgets but a game changer for how they conduct their overall business operations.
This webinar will cover the rules and what they mean to employer’s salary budgets and general operations.
- What are the rules.
- How the proposed rules will affect ALL employers. Which employers can be expected to be hardest hit.
- From what source will be the data that will automatically affect your annual salary and compensation levels.
- Why employers will be paying even “highly compensated” employees more.
- What is positive for employers regarding the regulations.
- What didn’t change.
- Why hiring more people may not be the best move.
- Unexpected ways these proposed regulations will affect your business operations.
Teri Morning, MBA, MS, SPHR, SPHR-CA is the President of her own HR Consulting firm and Principal Partner in a new company HindsightHR 2013 Employee Relations and Investigation Management software. She has over 15 years human resource and training experience in a variety of professional fields, including finance, retail, distribution, architectural, engineering, consulting, manufacturing (union), public sector and both profit and non-profit company structures. She has consulted with employers on... View Full Profile