FLSA Changes Delayed Through June 2017
On September 28, 2016, the House of Representatives passed a bill that would delay by six months the effective date of the United States Department of Labor‘s (DOL’s) new FLSA overtime regulations, reports the Society for Human Resources Management (SHRM). The move came after small businesses argued that the original deadline of December 1, 2016 would force them to lay off employees just weeks before the holiday season. If enacted, the Regulatory Relief for Small Businesses, Schools and Nonprofits Act (H.R. 6094) would postpone the effective start date for the landmark FLSA changes until June 1, 2017.
However, SHRM reports that many legislators believe this new bill will not be enacted. The Office of Management and Budget (OMB) issued a statement on September 27 asserting that the president would veto the H.R. 6094. The OMB’s maintains that delaying the new overtime rule would be disruptive to employers that have already begun taking steps to come into compliance and create new uncertainty for them heading into 2017.
Background on the FLSA changes
On May 18, 2016, the DOL published its final rule updating the Fair Labor Standards Act (FLSA) overtime regulations. There were big changes. The new FLSA regulations require that employers pay overtime (time and a half on anything over 40 hours worked in a workweek) to full-time salaried executive, administrative and professional employees making $47,476 annually ($913/week) or less. (There are extremely few exceptions to this requirement.) That’s roughly double the old salary level needed for overtime exemption. According to Fast Company, the percentage of full-time salaried employees that will now be eligible for overtime pay will jump from 7% to 35%. The DOL estimates that over four million American employees will be impacted by these new FLSA regulations. Other estimates, like that of Economic Policy Institute go as high as 12.5 million workers.
While our regular readers and fellow HR-minded businesspeople have known about the historic proposed DOL overtime rule changes for some time, far too many employers are confused or unaware of the true effects this ruling will have on their workplace as of December 1, 2016. “We have personally seen from the FLSA audits, reviews and questions we have handled since the changes were first proposed in 2014 that employers have a lot to examine within their workforces that they have not had to pay much attention to for many years, if ever before,” says Tina Hamilton, PHR, president of myHR Partner.
This whole legislative push started back in June of 2015, when The Department of Labor (DOL) officially proposed several changes to the Fair Labor Standards Act (FLSA) overtime regulations. At the time, we wrote about one educated guess we came across as to the date for when the new rules would go into effect. You can check that story out here.
At this time, the business community is left awaiting the fate of this latest bill. Stay tuned to this blog for more updates, and sign up for MODERN EMPLOYER to stay in the loop on these and other HR current events.
What does this mean for you as an employer?
The federal labor laws changes mean that businesses need to be prepared! If the proposed FLSA changes do go into effect, you may be required to pay overtime—time and one half—for hours worked over 40 hours per week to a percentage of employees who are currently salaried. That’s a lot of payroll expense and change to calculate into your costs, projections and bottom line. (Read more…)
An FLSA review has never been timelier.
At myHR Partner, we are qualified and experienced in conducting in-depth FLSA reviews/audits. Conducting one in advance of these proposed changes, will not only assure you are current with the federal FLSA regulations, it will help you plan for the potential impact both financially and for upcoming staffing changes. myHR Partner can provide your business with the planning of important functions including an FLSA audit, so you can focus more on strategizing and running your business. Our clients rely on the FLSA audit to properly classify employees based on the most current FLSA laws. To find out more about our FLSA audits, contact us today..