New OT Rules Now What?

Monthly Strategies

New OT Rules – Now What? Once an employer has figured out that a job will now be classified as nonexempt, an employer can As a result of the new rules, companies may also choose from these options: have to make adjustments to salaries and restructure compensation plans to comply with the new . Increase the salary level to maintain the threshold. exemption, and not worry about overtime. Employees can and have been accessing work after . Divide the current salary by 40 hours and switch regular hours from home, on the weekends, to paying at an hourly rate, and worry about holidays and during their vacation time via e-mail, overtime. texting and a variety of apps such as Asana, . Convert an employee from salaried to hourly, Basecamp, Slack or WhatsApp. Employees are based on actual hours worked, so the net cost is also conducting work through instant messaging via the same. Keep in mind that this will require LinkedIn and Facebook’s Messenger. When they reliable information about hours worked and do this, how are they compensated for it? final pay will vary with hours worked. Now that the U.S. Department of Labor’s (DOL’s) . Convert an employee from salaried exempt to new overtime rule has been issued, companies may salaried nonexempt and pay overtime for excess have to create or change their device management hours. policies to accommodate the new law and may need to use different software to help track hours. . Institute a fluctuating workweek where salary is for all hours worked, including overtime. Due to the new rule, previously exempt employees will be eligible for overtime when the law goes into When is an Investigation effect later this year. If companies don’t implement Necessary? the necessary changes to their pay practices and compensate nonexempt employees for all time As a general rule, any time an employee makes an worked, they should be prepared for lawsuits. informal or formal complaint to management, the employer should take immediate steps to begin an Employees who use Smartphone’s wind up working about 13.5 hours every day and as many as 72 hours investigation, protect those involved from further each week—which includes weekends, according to disruption and ultimately attempt to resolve the a 2015 study from the executive education alleged conflict. An employer may also conduct an firm Center for Creative Leadership. The study also investigation when a supervisor or manager revealed that aside from sleeping, people only spend witnesses or suspects employee conduct that about three hours a day doing other activities like violates a work rule or is inappropriate in the exercising or spending time with their families. workplace, such as being intoxicated on the job. The following are tips for employers adjusting to In compliance with federal, state or local laws, the new overtime regulation: certain kinds of conduct or occurrences will trigger . Figure out for each job whether it will be an investigation: on-the-job accidents and injuries, exempt, and if not, how to approach the workplace harassment and whistle blowing, to name overtime issue. a few. Employer alternative dispute or conflict . For employees who will be hourly, figure out resolution mechanisms call for an internal how to track all hours worked and use investigation of the complaint or dispute under verification systems. consideration. Notification by a government . Determine the communications and training agency that an individual has filed a complaint needed to implement these changes. alleging a violation of applicable law, such as equal employment opportunity or overtime Page 3 Monthly Strategies pay laws, may prompt an internal investigation if Please join attorneys William Bowser and Scott one has not already begun. Holt, from Young, Conaway, Stargatt and Taylor on July 21, 2016 for an informative workshop to In addition to any legal imperatives to investigate, help your organization prepare. This workshop will employers should ask the following questions in be from 3:00 pm until 5:00 pm followed by determining whether to conduct an investigation: networking and Hors D ‘Oeuvres at the Clarion . Does your policy mandate an investigation? Hotel – The Belle located at 1612 N DuPont Hwy, . How serious is the complaint? New Castle, DE 19720. . What are the implications of the complaint? Workshop Objective: You will learn about the . Who is complaining; are they part of a protected new FLSA rules and how to develop a class? comprehensive strategy to meet these challenges. . Is there, or has there been, more than one related concern? Overview: Bill and Scott will cover the implications of the new rules and steps employers Can you see litigation looming on the horizon? must take to prepare for these changes. Key topics Every organization must prepare for the inevitable to be addressed include: Comprehensive update of event or conduct that will necessitate an the changes in the FLSA Rules ; Auditing your investigation. While the ultimate goal of that exempt employee classifications and current investigation is to discover, report and take action compensation plans; Compensation and based on what happened and how it happened, the classification options to consider in view of the employer must be prepared to take steps to ascertain pending FLSA salary changes; Educating your if there is ongoing conduct that must be stopped managers on the new rules; How to communicate immediately and individuals who must be protected. changes to employees and how the changes will impact them; Discussion about the employee Workshop - New FLSA Overtime Ruling: relations challenges your organization may face as a Audit, Compliance, and Impacting Your result of these changes; and Critical steps to take Bottom Line immediately if faced with a DOL Audit or overtime claim. The Department of Labor (DOL) recently updated the Fair Labor Standards Act (FLSA). The new Who Should Attend: Individuals that are overtime rule will make 4.2 million salaried responsible for the company’s financials, human workers eligible for overtime pay and bring big resources, compensation, morale, training, and changes and challenges to employers. The new employment brand. Key attendees should include: rules become effective December 1, 2016 and have CEOs / Presidents; Human Resources Leaders; increased the salary level requirement for exempt CFOs; and Payroll Directors. employees to $913 per week, equating to $47,476 Cost: $15 for Delaware SHRM Chapter and annually for a full time employee. The new rules DelMarVa SHRM Chapter members. Non- have also increased the Highly Compensated Delaware chapter members cost is $65. Contact Employee to total annual compensation level of [email protected] to register by July 12th. $134,004 and these new rates will be automatically If your organization would like to learn more about the updated every three years. The new rule items in this newsletter, please feel free to contact significantly change the compensation strategy for Tricia Clendening at 302.373.1784 (cell) or businesses and now is the time to determine the 302.376.8595 (office) or [email protected]. legal and practical steps you must take to respond to Please contact us if you would like to be removed from the FLSA changes. our Monthly Strategies mailing list or if you would like for us to add someone to our mailing list.