Unfortunately, rules and regulations can’t be avoided. They are simply a part of doing business no matter what industry you fall into. Not only can these standards be confusing, but they can carry some compelling fees and penalties if not followed correctly. But that’s what we’re here for. baronHCM has a full collection of user-friendly tools to expedite compliance with DOL, ACA, PBJ, state and local regulations. Today we want to explore the Fair Labor Standards Act (FLSA) “Final Rule.”
The 1938 Fair Labor Standards Act was a far-reaching statute that not only established the 40-hour work week, but also set standards regarding child labor, minimum wage, and overtime compensation.
FLSA requires that salaried workers who work more than 40 hours per week are given extra compensation. There was an exception to this rule, however. The FSLA designated a class of EAP (executive, administrative, and professional) employees who would be exempt from the overtime pay standards if their salary was above a certain level.
The Exemption Threshold Has Been Doubled
After decades of leaving the exemption level unchanged as the cost of living grew, the Department of Labor significantly increased the threshold in an attempt to provide overtime compensation to the class of staff members Congress intended to protect. The updated provisions have been termed the “Final Rule,” with an effective date of December 1, 2016.
The salary threshold has been increased from $455/week to $913/week or $47,476 per year. It is estimated that 65,000 additional workers will be newly eligible for a total of 4.2 million employees who will benefit from the expansion in coverage. https://s3.amazonaws.com/public-inspection.federalregister.gov/2016-11754.pdf
Employers and organizations who fail to comply with the new mandate can face up to a $10,000 fine and be charged with a criminal offense. An employer who repeatedly violates FLSA standards can serve prison time.
Because the consequences are very serious, baronHCM believes that you should have a serious solution to ensure you stay compliant. Baron Workforce Management Suite gives you a five step guide to Final Rule compliance.
1) Determine which workers have a salary below $46,476 per year.
2) Identify how many hours the employees work per week.
3) Identify the FLSA-compliant hourly wage for affected employees and implement the changes by December 1, 2016.
4) Notify affected jobholders of the adjusted pay rate.
5) Use the data to adjust schedules, promotions, and pay rates to meet company goals and reduce increases in labor costs.
Salary Limit Will Be Adjusted Every Three Years
Moreover, the Final Rule includes a provision that will automatically adjust the unpaid overtime exemption requirements every three years in an attempt to maintain an appropriate distinction between exempt and non-exempt workers and avoid less-frequent extreme adjustments.
When it comes to DOL and ACA compliance, Baron Workforce Management Suite streamlines the process.
Click to Call: 631-266-2500
baronHCM offers Baron Workforce Management Suite, the powerful, fully-integrated Workforce Management Suite that makes it easy to optimize the performance of your supervisors, employees, and company.
Baron Workforce Management Suite includes Baron Time, Baron Scheduling, and Baron Mobile. Baron Workforce Management Suite is created for busy employers like you who need to streamline scheduling, automate time and attendance tracking, maintain regulatory compliance, and decrease labor costs.
How much can you save? Check our baronHCM ROI Calculator.
We can get you up and running with Baron Workforce Management Suite in minutes. Contact us today to book a demo.
1747 Veterans Memorial Hwy
Islandia, NY 11749