Preparing for the new overtime rules – June 2016 update

Preparing for the new overtime rules – June 2016 update

By on Jun 30, 2016 in Blog, Compensation Consulting, Compliance | 0 comments

As we reported on May 19, 2016, the new overtime rules go into effect December 1, 2016.  This means that employers will need to ensure that employees who make below the annual salary threshold of $47,476 are classified as non-exempt and paid overtime.

Organizational Architecture has been working with its clients to review employee classifications and determine if any employees currently classified as exempt will need to be reclassified as non-exempt.  In addition to performing this analysis, we are educating them on the rules related to the permitted exemptions from overtime.

Remember, in addition to meeting the salary threshold, employees must meet the criteria specified under the duties tests as well.  This means that to be exempt from overtime, employees must meet these criteria also.

What should you do?  If you have not started to prepare for this, now is the time to do so.  In addition to performing your analysis to determine who may be reclassified, you will need to determine

  • if pay adjustments above the threshold will be made,
  • whether your jobs meet the criteria in the duties tests,
  • how you will communicate new timekeeping requirements, and
  • how you will communicate this change to your affected employees.

Contact us if you’d like to learn more…and we’ll keep providing updates on this significant change, and provide ongoing recommendations for best practices to implement these changes.

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