It would be hard for any regulatory change to be as impactful as the passage of the Affordable Care Act. However, the Department of Labor’s impending changes to the overtime exemption rules may be just that. As if that wasn’t stressful enough, you will have far less time to prepare for the fallout of the overtime rule changes seen in Obamacare. The new rules won’t be phased in over the course of a decade. All signs point to the overtime rules taking effect before the end of 2016. That means you have the time to hire expert payroll & employment services in Centennial to avoid pitfalls with the rule changes. Here are a few things that will be required of you for compliance:
1. Audit employees’ work hours
As you know, the DOL’s poised to raise the minimum salary threshold to be exempt from overtime to $50,440. So the first step is calculating how many hours your employees who earn less than that are actually working. You don’t want to assume they work 40 hours per week only to be blindsided by the fact that they actually work 50 hours per week after the rule changes have reclassified those employees as non-exempt.
2. Assess the effect on benefits offerings
One question you’ll want to ask yourself: Will being reclassified as non-exempt make some employees no longer eligible for certain benefits that they once had? If so, do you want to change your benefits plans to enable those workers to keep their benefits or might you want to eliminate those benefits to make up for any costs resulting from having to now pay those workers overtime?
3. Expand time-tracking
No matter how you look at it, companies’ non-exempt employee populations are about to swell. That will require expanding systems to track more workers’ hours to ensure proper overtime pay. It couldn’t hurt to visit with your tech department now to start discussing ways to implement or expand time-tracking systems.
4. Revisiting remote work arrangements
It’s time to ask yourself what the rule changes could mean for remote work, checking work email, taking phone calls after hours, etc. You can dissuade or even prohibit non-exempt employees from doing these things after hours all you want but here’s the bottom line: Some are still going to do it and when they do, you need a way to track that work time and compensate them for it.
5. Create a communication plan
If you’re not going to raise some workers’ salaries and they’re about to be reclassified as non-exempt, you need a plan in place for how you’ll break this likely upsetting news to them.
Some issues you’ll need to tackle:
- Punching a clock. More workers are going to have to do it, and it may seem like a demotion. How will you explain why it’s now necessary?
- Loss of flexibility. For your current salaried workers, being turned into hourly employees means taking time off to go to the doctor or attend a child’s event could result in less pay. Again, how will you break this news to them? And will you let them make up the time?
As if you need any more reasons to hire Payroll Vault than those listed above to handle your payroll and employment services in the new year, the main one is to protect your business. Call us today for information on all we have to offer.
