Dear Preparing in Pewaukee, The Department of Labor (DOL) has made significant changes to the overtime exemption rules, which will impact millions of employers across the U.S. beginning in 2024. It’s great that you’re looking ahead to ensure your business stays compliant, but if you are just starting to look now, you may already be behind! The changes primarily affect which employees can be classified as exempt from overtime pay requirements under the Fair Labor Standards Act (FLSA). Here’s a breakdown of the key points you need to know: What Are the 2024 Changes?On April 23, 2024, the DOL issued a final rule that raises the salary threshold for employees to qualify as exempt from overtime pay under the FLSA. This rule applies to employees classified as executive, administrative, professional, and highly compensated employees. Let’s break this down:
After 2025, the DOL will also implement automatic updates to the salary thresholds every three years, starting in 2027. Who Does This Impact?The biggest impact will be on salaried employees who are currently classified as exempt but whose earnings fall below the new thresholds. If you have employees in that category, you will need to take action. What Are Your Options as an Employer?Once you’ve identified which employees are affected by these changes, you have two primary options:
Each option comes with its own costs and benefits. For example, raising salaries might be a more predictable expense, while reclassifying employees as non-exempt could lead to fluctuations in payroll costs depending on the number of overtime hours worked. There are other options to consider as well, but these are the primary options most employers are using. Conducting a Compliance AuditTo ensure you comply with the new rule, it’s essential to conduct a thorough audit of your salaried employees' wages and job duties. Here’s how to approach it:
What Happens If You Don’t Comply?Failing to comply with these new rules can result in costly wage and hour violations. Employees who are misclassified as exempt but earn less than the new threshold could be entitled to back pay for overtime, plus penalties. These claims typically hit employers as a class or collective action, which are very costly to defend or pay. Final ThoughtsPreparing in Pewaukee, you are not alone to be concerned and right to prepare. These new rules require immediate attention to ensure your business remains compliant. I recommend you start the process now by reviewing your employees’ salaries and job duties, using this Exemption Worksheet as a guide. If you have any questions or need help navigating the complexities of the new overtime rules, feel free to reach out to me at NextGen Legal. We’re here to make sure your business stays ahead of the curve. Warm regards, Attorney Bob P.S. Have more questions about FLSA overtime rules or employee classification? Contact us at NextGen Legal for tailored guidance to keep your business compliant! About Attorney Bob
At NextGen Legal, we're transforming the traditional law firm model. Bob’s extensive experience in labor and employment law has been instrumental in shaping a service that offers both day-to-day legal counsel and rapid response for emergent issues. We strive to empower our clients with the knowledge and strategies necessary to navigate the legal landscape effectively and make confident employment decisions, without the fear of unexpected costs. Rated a Rising Star by SuperLawyers (an accolade reserved for only 2.5% of attorneys in Wisconsin), Bob provides strategic legal advice and counsel to companies of all sizes, helping business leaders make confident, informed decisions. His expertise spans employment law, regulatory compliance, litigation, safety, corporate strategy, and risk mitigation. Bob excels in transforming complex legal challenges into clear, actionable business solutions, offering strategic guidance to leadership teams. Disclaimer: Please note that the information provided above is for informational purposes only and should not be construed as legal advice on any subject matter and the scenarios presented in "At Your Service with Attorney Bob" are based on hypothetical fact patterns. The responses provided are for informational purposes only and should not be construed as legal advice on any subject matter. No recipients of content from this column, clients or otherwise, should act or refrain from acting on the basis of any content included in the column without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient’s state. The content of "At Your Service with Attorney Bob" and "Legal Alerts from Attorney Bob" contains general information and may not reflect current or subsequent legal developments, verdicts, or settlements. This content is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship. Readers of this column are encouraged to seek out their own legal counsel for any specific legal concerns they may have. Alternatively, readers may reach out to Attorney Bob at NextGen Legal for specific legal guidance tailored to their unique situation. Contact information is as follows: Email: [email protected] Website: www.nextgenlegalsc.com We welcome your inquiries but urge you to make informed decisions regarding legal matters.
0 Comments
Your comment will be posted after it is approved.
Leave a Reply. |
Archives
October 2024
Categories |