Most business owners have heard about the Fair Labor Standards Act’s new Overtime Rule, which takes effect on Dec. 1.
But since the rule redefines which workers are covered by the FLSA—by a big margin—we wanted to lay out a few of the key terms, deadlines and rules that are being thrown around lately.
What is the FLSA?
The Department of Labor’s (DOL) Fair Labor Standards Act establishes minimum wage, overtime pay, record-keeping, and youth employment standards covering employees in the private sector and in Federal, State, and local governments.
What is the “Final” Overtime Rule?
Announced six months ago and goes into effect Dec. 1, 2016. Mandates that salaried employees making no more than $47,476 be paid time and a half for weekly hours worked over 40.
Is anyone exempt?
Employees who are paid a salary (not subject to reduction based on quality or quantity of work), but make more than $47,476, are considered exempt and DO NOT have to be paid time and a half for hours worked over 40, according to the Overtime Rule. Certain professions (doctors, lawyers and teachers, for example) are also exempt regardless of salary.
An employer with an employee who regularly works overtime and is paid close to the threshold may decide to raise their salary rather than paying them for overtime. On the flip side, if an employee making less than $47,476 rarely works overtime, you may feel that it’s worth paying them overtime occasionally, as mandated by the new rule.
What kinds of records are required?
Under the FLSA, employers are required to retain records of employees’ work hours for three years. The DOL suggests that employers simply make note of an employee’s typical work week and then record any deviations for an employee who rarely works overtime. But whether your non-exempt employees work overtime once a month or once a year, records must be accurate and comprehensive.
What happens if you don’t comply?
Employers must begin complying, and retaining accurate employee hours, as of Dec. 1. An employee may sue an employer who isn’t in compliance under the FLSA. Additionally, as with all FLSA regulations, compliance is regularly monitored by a team of DOL investigators who are stationed throughout the U.S. to gather data on wages, hours and other employee conditions. The DOL can cite employers who do not comply, forcing them to pay back wages in addition to fines.
How can ExakTime help?
ExakTime helps companies of all sizes track employees’ hours and activities with a simple-to-use digital time tracking app and employee jobclocks that can be mounted at any indoor or outdoor job site, all of which feed data into our time tracking software in the cloud, for easy access and management.
As you transition to tracking the hours of your salaried employees and feel you need assistance keeping proper records, please give us a call or fill out the form below. We’d be happy to discuss what system might be right for you.