Overtime Exemptions Compliance Program
Under the Fair Labor Standards Act and existing overtime regulations, employers are allowed to classify certain employees as “exempt” from overtime pay if they are paid on a salary basis, make a certain salary amount, and perform certain white-collar job duties. In May 2016, the Department of Labor’s Wage and Hour Division published its final revised overtime exemptions rule, which more than doubles the salary threshold for overtime exemptions from $455 per week ($23,660 per year) to $913 per week ($47,476 per year). The new regulations also raise the minimum annual salary threshold for the highly-compensated employee exemption from $100,000 per year to $134,004. The revised final rule takes effect December 1st, 2016.
On or before December 1st, 2016, employers must reclassify any currently exempt employees as non-exempt if the employee’s weekly or annual salary does not exceed the new thresholds. The DOL estimates that the revised final rule will extend the right to overtime up to 4.2 million currently exempt workers and will strengthen existing protections for 8.9 million salaried workers.
According to previous DOL estimates, over 70% of employers are not in full compliance with wage and hour laws, including existing overtime exemption regulations. Non-compliance with overtime regulations can result in fines, back pay, front pay, loss of overtime exemptions, damages, and penalties ranging from up to $1,000 per non-willful violation and up to $10,000 for each willful violation.
Prior to the December 1st effective date, covered employers must do all of the following:
• Reclassify any employees who will no longer be eligible for an overtime exemption based on the revised salary thresholds.
• Audit the duties of existing exempt employees to identify and correct misclassifications.
• Implement a process for determining whether any new hires are eligible for exemption.
• Document all compliance efforts in accordance with FLSA record keeping requirements.
To help employers ensure full compliance with new and existing regulations before the December 2016 effective date of the final revised overtime rules, Personnel Concepts has introduced a comprehensive Overtime Exemptions Compliance Program. It includes a comprehensive reference guide, tips & recommendations from an attorney, exemption checklists, record keeping forms, instructions for auditing your existing overtime exemptions, and online access to fill-in-the-blank forms & customizable policies.
Who Needs It
All employers with two or more employees on payroll must comply with various wage & hour and overtime provisions of the Fair Labor Standards Act and DOL regulations, including the revised final overtime rules (29 CFR Part 541).
Good Faith Compliance
While many of the complex provisions of overtime regulations can result in inadvertent errors, government auditors and inspectors take into account whether the employer demonstrated a good faith effort to comply. Using the customizable materials included in our program can help you demonstrate good faith compliance during an audit or inspection.
Lawsuit Prevention & Defense
Employers have become increasingly susceptible to individual and class-action lawsuits relating to wage and hour violations. Penalties for non-compliance and judgments in FLSA lawsuits are significantly more severe when a violation is found to be willful. Utilizing our program’s exemption checklists, documentation forms, and customizable policies can help protect your business from potentially costly lawsuits by proving your organization did not willfully violate the regulations.
If you’re not completely satisfied with our Overtime Exemptions Compliance Program, you can return it within 30 days from the original date of purchase for a full refund, less shipping and handling.
Our Overtime Exemptions Compliance Program includes the following tools and resources:
- A plain-language Overtime Exemptions Compliance Guide featuring recommendations from an attorney, complete coverage of the revised final rule, FAQs, and instructions for auditing your existing overtime classifications.
- A Compliance Checklist to help businesses determine their current level of risk under the overtime exemptions rules.
- 10 Overtime Exemption Checklist Forms to determine if a given employee’s salary level and job duties meet the criteria for an overtime exemption under the revised final rule.
- 10 Job Duties Analysis Forms to document and analyze an employee’s actual job duties compared to pre-existing job descriptions.
- 10 Salary Deductions Policy Acknowledgment Forms to comply with existing overtime regulations concerning salary basis requirements.
- Online Access to Fill-In-The-Blank Forms and Customizable Policies to ensure compliance with documentation and record keeping requirements under new and existing overtime regulations.
- A revised 2016-2017 FairPay Overtime Rules Notification Poster (11x17 laminated) to demonstrate good-faith compliance and notify employees of their rights and obligations.