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Employers: Be prepared for Dec. 1 FLSA overtime deadline

Overtime pay change image

October 19, 2016

In May of this year, the US Department of Labor (DOL) published changes to the Fair Labor Standards Act (FLSA) that will affect which employees are eligible for overtime pay. The new rule changes the salary threshold for executive, administrative and professional exemptions dramatically from its current level of $23,660 to $47,476. The new rule also changes the exempt level for highly compensated employees (HCEs) from $100,000 to $134,004.

Employers must comply by Dec. 1, 2016.

While efforts may be underway to delay or block the implementation, we urge you not to delay in evaluating which positions are affected in your organization and preparing to implement changes in compliance with the new ruling. It is uncertain whether any congressional or legal action will affect the changes before the Dec. 1 compliance deadline. Required changes may include adjusting compensation structures, reclassifying employees, and/or changing salaries, all of which require careful consideration and communication.

Legislation passed in the U.S. House would delay the implementation of the new requirements, and separately, leaders from 21 states filed an emergency motion to temporarily bar the overtime rule, claiming the new overtime rule will place a heavy burden on state budgets. The U.S. Chamber of Commerce and other business groups have also filed a separate challenge to the rule in the same federal court. Regardless of these actions taken by various groups to delay the ruling implementation, we recommend that you prepare now for implementation by Dec. 1, as we believe such blocking efforts are not likely to succeed in time to delay the Dec. 1 deadline.

For additional information on the FLSA change, check out these resources:

Need more information?

For more information about FLSA or other employee-compensation related questions, please contact senior organizational development consultant Carrie Wiegand Cox using her information below.

Carrie Cox, PHR, SHRM-CP

Senior Organizational Development Consultant,
Organizational Development & Family Business Services
Carrie has experience in a variety of human resource functions, including labor laws, compensation structures, employee classification, benefits administration, performance management, and human resource best practices. She has served clients in a number of industries including manufacturing, construction, banking, and not-for-profits. Carrie is a member of the national and local chapters of the Society of Human Resource Professionals (SHRM) and serves on the Wichita chapter board of directors.

She is a certified practitioner for the Myers-Briggs Type Indicator® and the Hay Group’s Emotional and Social Competency Inventory. Her additional certifications include Professional in Human Resources (PHR) from the Human Resource Certification Institute and SHRM-CP designated by the Society for Human Resource Management.
Carrie Cox photo
Carrie Cox, PHR, SHRM-CP
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Information in this document has been obtained by Allen, Gibbs & Houlik, L.C. from sources believed to be reliable. However, AGH does not guarantee the accuracy nor completeness of any information. This communication does not and is not intended to provide legal, accounting or other professional advice or opinions on specific facts or matters, and accordingly, AGH assumes no liability whatsoever in connection with its use. Nothing in this communication can be used to avoid penalties that may be imposed by a governmental taxing authority or agency.