Page 37 - YourSource November 2016

“The new rules increase the salary threshold for employees classified as executive, administrative or professional from $455 per week ($23,660 per year) to $913 per week ($47,476 per year).”
three years to match the 40th percentile of full-time salary workers in the lowest wage census region, (currently the South), and the $134,004 per year HCE threshold to match the 90th percentile of full-time salaried workers nationally. For the first time, the new rules permit non-discretionary bonuses, incentive payments and commissions to factor into employees pay for achieving the salary threshold. However, bonuses, incentive payments and commissions may count toward achieving only up to 10 percent of the $913 per week salary threshold and must be non-discretionary and paid to the employee on a quarterly or more frequent basis.
DON’T STOP PREPARATIONS
In late September, in an effort to thwart the impact of the new rules, 21 states filed a lawsuit seeking to overturn portions of the rules and the House of Representatives passed the Regulatory Relief for Small Businesses, Non-Profits Act (a bill which would delay the rules from taking effect until June 1, 2017). However, the legal challenge and legislative attempt at delaying the rules are likely to fall short of stopping the new rules from taking effect on December 1st and most legal experts agree that businesses should not stop preparations.
PRACTICAL ADVICE FOR THE NEXT 30 DAYS
Getting overtime wrong can be extremely costly for employers and can result in liability for back wages that were underpaid in violation of the law, civil money penalties of up to $1,110 per violation, criminal charges, private civil lawsuits and costly class action lawsuits. So what should employers do over the next 30 or so days to comply with the new rules? Employers should update and review overtime and time
Ms. Corvo is a partner with LeClairRyan, P.C. where she focuses her practice on employment litigation and employment counseling. Ms. Corvo has extensive experience litigating employment claims, including wage and hour claims and routinely counsels employers on complying with overtime and wage and hour requirements. To learn more about Laura Corvo, visit her page at www.leclairryan.com/laura-h-corvo/ or email her at Laura.Corvo@leclairryan.com with questions.
reporting policies and procedures. Employers should also work with legal counsel to identify the positions that will be affected by the new overtime rules, audit the classifications of those positions and start crunching the numbers to evaluate how best to comply with the new rules to minimize the impact on the bottom line. Employers may consider the following:
• Raising employee salaries to the new threshold so employees remain exempt;
• Reclassifying workers from exempt to non-exempt and minimizing the amount of overtime;
• Adjusting employee hourly rates to factor in the amount of overtime worked;
• Reducing employee hours and eliminating waste;
• Staggering employee shifts;
• Budgeting bonuses, incentive payments and commissions to meet up to 10 percent of the new salary threshold. YS
NOVEMBER 2016
YOURSOURCE 37