The U.S. Department of Labor (DOL) published monumental changes to the overtime rule that will make approximately 4.2 million currently exempt employees eligible for overtime pay later this year.
The DOL has issued its long-awaited Final Rule that will make it harder for many workers to be qualify for the overtime exemption.
This rule goes into effect Dec. 1, 2016.
Notably, the final rule does not change any of the existing job requirements to qualify for an exemption.
Identify current exempt employees who will lose exempt status based on the increased salary threshold (anyone earning under $47,476) and either reclassify these employees as non-exempt or raise their salary/non-discretionary compensation to meet the new salary test.
With changes coming to the Wage and Hour landscape, now is the time for employers to analyze the classification of each exempt employee and independent contractors. This will go a long way in avoiding huge headaches and penalties. Employers need to start preparing now by reviewing employee classifications and job descriptions, and consider how their pay systems could be affected if many of their exempt employees become hourly or if independent contractors are deemed employees.