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Understanding the Dept. of Labor's new overtime rule - II

Last time, our blog discussed how no matter how busy business owners may be at the moment, they must ensure that they are prepared for an exceedingly important new rule from the U.S. Department of Labor that will take effect very soon.

Specifically, we discussed how 4.2 million workers across the U.S. -- including 331,000 here in Florida -- will become eligible for overtime pay on December 1, meaning employers now have less than six weeks to make the necessary adjustments.

At its core, the new rule dictates that the current threshold established by the DOL as part of the "salary level test" will rise from $23,660 to $47,476, expanding the pool of workers eligible for time-and-a-half to a considerable degree. In addition, the new rule calls for this salary threshold to be revised every three years.

Regardless of how they may feel about the move, business owners across the U.S. have naturally had very real concerns about how exactly they could structure their organization to ensure compliance.

According to the DOL, business owners have multiple options for achieving this objective:

  • Simply adapt to the new rule by keeping the annual salaries of newly eligible workers unchanged and pay them overtime wages as necessary
  • Evaluate existing processes and, if possible, make schedule adjustments and reallocate manpower, such that newly eligible workers are no longer working over 40 hours per week
  • Raise the annual salaries of newly eligible workers to at or above the new salary threshold so they are ineligible for overtime   

It's worth noting that legislation has been introduced on Capitol Hill calling for the official launch date of the new overtime rule to be pushed back six months to June 1, 2017. While the measure has passed the House, the chances of it gaining the necessary traction so close to the official launch date appear slim.  

It's also worth noting that the DOL has recently been hit with multiple lawsuits over the new rule, with the bulk of them claiming the agency exceeded the scope of its rulemaking authority and that the new overtime provisions violate the Fair Labor Standards Act.

Stay tuned for updates …

Consider speaking with a skilled legal professional if you have questions about the new overtime rule, or your rights and responsibilities as an employer.

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