- Parental Leave
- Pay Disparity
- Religious accomodation in the workplace
- Equal pay and prior salary information
- I quit! How to avoid constructive discharge
- You Can't Shred Email
- Navigating Unemployment Claims
- Considering Criminal History in Pre-Employment Decisions
- Defamation Claims from Former Employees
- Mixed Motive Causation
- Requesting Accomodation: Kowitz v. Trinity Health
- Antitrust Law in Human Resources
- An Evolving Standard: Joint-Employment
- What Does At-Will Employment Mean for Employers?
- Let's Talk About Wages
- THE FLSA: CHANGES ARE COMING
- Follow Up: Obesity and the ADA
- The Importance of Social Media Policies
- Is Obesity a Qualifying Disability under the ADA?
- Retaliation on the Rise: The EEOC Responds
- What Motivates You?
- "But I thought ...
- Who’s expecting? And what is he expecting?
- Are You Still Doing Annual Performance Reviews?
- Who is Your Employee?
- The unpaid intern trap Part II
- “We’ve been the victim of a cyber-attack”
- So, a Hasidic Jew, a nun in a habit and a woman wearing a headscarf walk into your office?
- The unpaid intern trap
- Pregnancy in the workplace
- Let's talk about honesty.
- "Did You Know" Series - Part I
- Conducting an Internal Investigation
- What HR can look forward to in 2015!
- The chokehold of workplace technology
- Does your company have trade secrets?
- North Dakota Construction Law Compendium for 2014
- Does the North Dakota baby boom affect you?
- Ban the Box? Why?
- The end of the world as we know it
- Everybody has an opinion
- Changes, Changes, Changes!
- Nick Grant presents at North Dakota Safety Council's 41st Annual Safety and Health Conference
- Email impairment: A potentially harmful condition
- Are Employers Required to Give Stressed-Out Employees Time Off?
- Can you obtain a credit report when investigating employee wrongdoing?
- Can’t we just sidestep the ACA?
- Should Your Employees Telecommute? Part III
- Should Your Employees Telecommute? Part II
- Should Your Employees Telecommute?
- Proper Investigation of Employee Misconduct
- Battles in the Wellness War
- Rules are rules! Aren’t they?
- What's going on in Bismarck
- A glimpse ahead
- Obesity as a disability under the ADA – reweighing the issue
- What’s next for your business under the Affordable Care Act?
- Criminal Background Checks
- Becoming a lawyer is a process, not an event [Section 5 of 5]
- Congress Says Yes To North Slope Energy Jobs Bill
- Test Your Knowledge of Social Media Policies and Employee Discipline
- Becoming a lawyer is a process, not an event [Section 4 of 5]
- What Every Employer Needs to Know About the NLRA
- Will the 2012 Elections Make A Difference
- Where There's Smoke...
- Dress Code Etiquette: Is Casual Friday Becoming Freaky Friday
- The Next Disaster May Be Yours
- Hostile Work Environment Claims
- North Dakota Employment Law Links
- There's An App For That
- Am I a “Business Associate”? Why Should I Care?
- Do You Recognize a Cat's Paw When You See One?
- Cell Phones Can Cost a Lot, Part II
- Becoming a lawyer is a process, not an event [Section 3 of 5]
- Cell Phones Can Cost a Lot, Part I
- The Economy - What HR Professionals Need To Know
- Becoming a lawyer is a process, not an event [Section 2 of 5]
- Three New Challenges For HR Professionals
THE FLSA: CHANGES ARE COMINGBy: Allison Mann
It has been a long time coming, but the time is drawing near. The changes to the Fair Labor Standards Act (FLSA) are set to take effect December 1, 2016, as stated in the Final Rule published May 18, 2016. The changes have the potential to significantly affect American businesses, small and large. The Department of Labor estimates that it will extend protection to over 4 million workers in its first year of implementation, and the Economic Policy Institute has estimated that it will affect 27.5% of North Dakota salaried workers. It is wise for human resource professionals to start preparing their companies for those changes now—before the changes take effect and their companies are in violation of the law.
The FLSA and its Changes:
First, a quick summary of the FLSA is in order. The FLSA is a federal law that governs the wages and overtime wages of employees in the United States. It sets the federal minimum wage at $7.25, and provides that certain employees (non-exempt employees) are to be compensated at time-and-a-half for any hours worked above forty hours per week. Certain other employees (exempt employees) are not entitled to overtime compensation. In order to be considered an exempt employee, three elements must be met: (1) the employee must be paid a fixed salary not subject to reduction because of quality or quantity of work; (2) the salary must meet a minimum threshold amount; and (3) the employee’s job duties must be primarily administrative, executive or professional.
The most significant change reflected in the Final Rule is a change in the threshold salary amount for exempt workers. The Rule changes the threshold from $23,660 per year to $47,476 per year. It also provides that this threshold amount will be adjusted every three years to account for inflation. This is not the only change the Rule makes, but it is the most significant.
The HR Lesson:
In sum, the change represents a significant expense that many businesses may not be prepared to absorb. However, noncompliance is costly, with civil monetary penalties of up to $1,100 for each violation of the FLSA’s overtime pay provisions.
Case studies are helpful when trying to craft a potential solution. Take for example the fictional ABC, Corp. that pays Jane, a salaried executive $30,000 per year. Jane works on average fifty hours per week. Under the old rule, Jane fits firmly within the exempt category. However, under the Final Rule Jane is nonexempt unless ABC makes a change. ABC may consider the following options:
As can be seen in the examples above, each of the potential solutions has its own set of benefits and drawbacks. In addition, this is only using one employee as an example. The issue compounds itself with each additional employee. One option could work great in one situation, but may completely fail in another. Each employer will have to carefully evaluate its business model to see which solution, or mix of solutions, will work best.
One thing is clear. Employers cannot do nothing. The changes are coming, and being in violation of the Act is not an option.
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I make a serious effort to be accurate in my writings. These articles are not exhaustive treatises, though, so do not consider them complete or authoritative. Providing this information to you does not create an attorney-client relationship with my firm or me. Do not act upon the contents of this or of any article on our homepage or consider it a replacement for professional advice.
Reprinted with permission from an article submitted for publication in the June, 2016 Southwest Area Human Resource Association newsletter.