Thought Leaders Series #3: Three Priorities for New OT Rules

The Department of Labor (DOL) decided to shake things up a bit by issuing proposed overtime law changes for 2016. Back in June 2015 when the news hit, many human resources departments struggled with how this would change their current process and procedures for exempt vs. nonexempt employees. As many of us know, incorrectly classifying employees as exempt or nonexempt can lead to costly litigation and fines for employers. With the changing overtime rules, HR departments and upper management should all be aware and knowledgeable of this particular area of employment law.

Basically, the DOL plans to more than double the minimum annual salary for executive, administrative and professional overtime exemptions from $23,660 to $50,440 yearly. The starting point for highly compensated employees would rise to $122,148 from $100,000. These increases will mean that some employees who were previously classified as exempt will now be made non-exempt employees. What does this look like on the day to day level? Employers will have to change work schedules or pass out overtime pay, simply put! So make sure that you are reviewing your employee classifications and follow these guidelines as soon as the ruling becomes final on these proposed changes so that you do not face litigation or employee misclassification fines. Here are a few simple tips to help!

  1. Assess the scope of the issue for your particular organization – what does the impact for your company look like? How many employees will be affected? Do the leg work ahead of time so that you know what you are facing once everything is finalized.
  2. Develop a strategy for managing and implementing the changes – how will you relate this information to your employees? What is your game plan? Again, do the prep work so that you are well ahead of the curve on this one!
  3. Communicate with your employees! As always, communication is key to effective interpersonal relationships in the workplace. An open door policy when it comes to questions pertaining to pay, hours, and duties will go a long way to employee satisfaction.

As a former administrator of the DOL’s Wage and Hour Division, Mr. Paul DeCamp has several years of experience with the DOL as well as with the other side of the court room as a shareholder in the Washington D.C. law firm, Jackson Lewis PC. This information was presented by Mr. DeCamp in a special edition of Society for Human Resources Management’s HR Magazine for 2015/2016.