Preparing for the FLSA Overtime Rule: What HR Professionals Need to Do

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If you are an HR professional, I’m sure you are waiting anxiously for the release of the U.S. Department of Labor’s (DOL’s) final changes to the FLSA overtime exemptions. It’s going to be a tough transition and will potentially cost employers a lot of money, but the revised standard will also create an opportunity for HR to correct some past mistakes.

According to an initial estimate by the U.S. Department of Labor (DOL), the changes to the FLSA regulations may cost employers as a whole between $870.3 million and $1.576 billion.

Not only that, but it is also estimated that each affected business will need one hour to get up to speed on the changes.

The department calculated that it will cost $254.5 million for businesses to become familiar with the regulation; $160.1 million to make necessary adjustments; and $178.1 million in managerial costs according to SHRM.

What You Can Do Now

There are a number of steps employers can take now to make the transition easier and reduce profit loss due to FLSA overtime rule.

First, it’s important to identify exempt positions where employees earn less than $50,000.

Then once you have in mind how many employees are within this range, decide for which positions you will increase the salaries above the new salary level.

For each employee that you deem as likely to be reclassified, we recommend determing:

  • What the typical tasks are that these individuals perform on a weekly basis and how many hours they usually take to complete these tasks..
  • What job duties can be redistributed or eliminated.
  • If an entire function can be outsourced.
  • Whether certain benefits will change for workers moving from exempt to nonexempt.

After converting workers to hourly pay, employers will need to put restrictions on overtime work to avoid abusing the system and losing unnecessary money.

Options to consider instead of converting employees to hourly work include:

  • Salaried nonexempt employment.
  • Fluctuating workweek, though this is not administratively easy.
  • Belo contract, which is like the fluctuating workweek, only more complicated.

With all of this being said, employer’s communication plans and training should be ready at will to make these changes, to avoid any extra complications or confusion.

Just remember, the overtime rule is not the end of the world. It’s going to be stressful and confusing at times, but its only changing the way do business. 

Still not sure what exactly the FLSA overtime exemptions are and how it will affect you? Then check out our blog post that covers some fast facts on the new regulations.

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