“I’ll take FLSA for $1,000, Alex.”
Wouldn’t it be great if Fair Labor Standards Act (FLSA) issues were only topics on a game show? If you were wrong, the value of the question would merely be deducted from your winnings. But you’re an employer, and if you get the FLSA wrong, it can be costly and result in a lawsuit.
According to SHRM’s FLSA Overtime Rule Resources page:
“The FLSA overtime rule determines whether employees are eligible or exempt for overtime pay. Exempt employees, because of their rate of pay and type of work that they do, are not eligible for overtime pay for hours worked over 40 in a workweek. Nonexempt employees must be paid time and a half for any hours worked more than 40 in a workweek.
The Department of Labor proposed an increase in the salary-level threshold for white-collar exemptions to $35,308 per year from $23,660. If finalized, the proposed rule would extend overtime protections to more than one million workers who are not currently eligible under federal law.
Unless exempt, employees covered by the Fair Labor Standards Act must receive at least time and one-half their regular pay rate for all hours worked over 40 in a workweek.
Meeting the salary threshold doesn't automatically make an employee exempt from overtime pay; the employee's job duties also must primarily involve executive, administrative or professional duties as defined by the regulations.
HR professionals must know how to determine overtime eligibility for each employee.
Under the rule proposed March 7, 2019:
Workers who do not earn at least $35,308 a year ($679 a week) would have to be paid overtime, even if they’re classified as a manager or professional.
Nondiscretionary bonuses and incentive payments (including commissions) paid on an annual or more frequent basis may be used to satisfy up to 10 percent of the standard salary level.
The special rule for highly compensated employees would require workers to earn a total annual compensation of at least $147,414 ($679 of which must be paid weekly on a salary or fee basis).
Special salary levels would apply to certain U.S. territories and an updated base rate would apply to employees in the motion-picture industry.
No changes to the duties tests were proposed.
The proposed rule is expected to become effective approximately in January 2020.
The Department of Labor intends to propose an update to the salary threshold every four year to ensure that these levels continue to provide useful tests for exemption. Updates would not be automatic and would continue to require notice-and-comment rulemaking.”
The overtime rule conundrum has caused a lot of angst and confusion for employers.
"We all thought that the FLSA would be affecting businesses differently by today, but the reality has been something else," says employment attorney Louis Lessig. Lessig will present the #SHRM19 MEGA Session FLSA Jeopardy 2019 where attendees will:
- Get the latest information and case law involving the Fair Labor Standards Act (FLSA)—and find out what they should do next.
- Understand the latest FLSA regulatory changes.
- Learn ways to avoid potential challenges under the FLSA and the impact on salary projections.
- Develop a plan to deal with your particular positions and planning for salary development to circumvent FLSA issues.
- How much do you know about the FLSA? Are your employees properly compensated?
When it comes to FLSA, do you follow the elusive guidelines? Do you have all the answers? Do you even know what questions to ask? When every payday is a new adventure, are you fully prepared for what the day will bring? Or do you worry about facing a Department of Labor audit, keeping up with the latest FLSA and wage and hour issues, and making mistakes over exempt/nonexempt employees?
Please join @shrmnextchat on May 29 at 3 p.m. ET for a special edition #SHRM19 #Nextchat with special guest, MEGA Session speaker and employment attorney, Louis Lessig (@LouisLessig). We’ll chat about the ideas and strategies that will assist HR in being better prepared for FLSA, the next payday and the next interaction with the U.S. Department of Labor. We’ll also consider the latest issues surrounding the FLSA and how to avoid costly penalties. We'll challenge what you thought you knew and even surprise you with a few FLSA Jeopardy “Daily Doubles.”
Q1. As of today, what is your biggest concern in regards to the proposed DOL Overtime rule?
Q2. What are your biggest challenges with administering FLSA now?
DOUBLE JEOPARDY #1
Q3. What factors should be considered when determining employee classification? Exempt vs. non-exempt? Contractor?
DOUBLE JEOPARDY #2
Q4. How is your organization avoiding the misclassification of employees and FLSA lawsuits?
DOUBLE JEOPARDY #3
Q5. As an employer/HR, what are you doing to avoid FLSA retaliation claims?
DOUBLE JEOPARDY #4
Q6. As an employer/HR, what are some “lessons learned” from getting FLSA wrong in the past?
Q7. What resources have you found helpful in keeping up with and understanding FLSA changes and news?