New Department of Labor Overtime Rule- HR Minute - YouTube

Hey there I'm Claudia St. John, President of Affinity HR Group.

We are your HR partner and resource.

Here to announce some big news coming out of the federal government on regulations relating

to overtime provisions under the Fair Labor Standards Act.

It's been pretty quiet from the federal level so this is exciting for us because something

new is happening federally.

Not great news, but news nonetheless and we wanted to share that with you.

We've written a couple of HR Minutes on this and we're going to be hosting webinars and

providing more information, but essentially here's the deal.

Currently, under the Fair Labor Standards Act everybody has to earn at least minimum

wage, they should have their hours tracked, and they should get overtime for any hours

worked in excess of 40 hours in a work week.

That should apply to everybody except for a few select folks who are exempt from this

regulation.

Those exemptions are spelled out in the regulations by the Department of Labor.

To find out about those exemptions you want to Google USDOL fact sheet number 17.

There's a number of these fact sheets and they will give you all of the exemptions.

Essentially, to be considered exempt from the Fair Labor Standards Act and not to have

to be eligible for overtime, there are two pieces to this puzzle.

One is you have to have a minimum income and the other is you have to satisfy the duties

test, white collar test.

Certain essential functions of the job that would qualify you to an elevated status you

would then not be eligible for overtime and you would be paid on a salary basis.

That's why we call those folks on salaries exempt because they are exempt from the

provisions of the Fair Labor Standards Act.

What is changing effective January 1, 2020 is that the minimum threshold income you have

to earn is going to be going up from currently $23,660 or $435 a work week to an annualized

salary of $35,568 or $684 on a weekly basis.

What that means is anybody earning less than that, anybody earning less than $35,568 needs

to be classified as non exempt, their time needs to be tracked, they need to be earning

at least minimum wage and they need to get overtime for any hours worked in excess of

40 hours.

So, you have anybody you are treating as salaried today who is earning less than that 35 thousand

and change, you're going to need to reclassify them as non exempt, track their time, and

they will be eligible for overtime.

The other alternative is you can increase their salary up to above that minimum threshold

to satisfy the minimum income in order to be exempt from the Fair Labor Standards Act.

The thing is, your income might qualify for being exempt but you still have to satisfy

the duties test.

So you can satisfy the minimum income and still be misclassified if the duties of your

job don't really warrant a classification of exempt.

For example, many of the customers or clients that we work with have their customer service

reps or their inside sales reps classified as exempt and are paid salary.

In most instances those are misclassifications.

Even though they are making way more than the proposed 35 thousand dollars going forward

the duties of their job do not qualify them for being exempt.

It's pretty confusing stuff.

The only thing you need to know right now is that minimum income is going up so if you

have anybody falling beneath that new threshold you really need to figure out what you're

going to do with them.

Either reclassify them or up their income.

The only exception to this is there are states like California where their minimum income

threshold to be considered exempt is much higher than the federal level, even the one

that's being proposed.

So, the federal level is the floor.

The federal level supercedes any state legislation unless it is richer than the federal level.

So, in the case of California for example you still would stick with the regulations

in California because the federal level is still below that.

We're going to be hosting a few webinars on this.

We've written a couple of pieces on this in the recent HR Minutes.

For most of our folks, we're going to be hosting a webinar December 3rd.

I'll get you more information about that.

Shoot me an email at [email protected] and I can get you signed up for that.

For those of you that are independent insurance agencies, we are going to be working with

Big I in order to have a webinar for you on October 30th.

Again, shoot me an email on that if you are interested.

In the meantime, we will keep you posted the best we can.

If you need any help trying to figure out what to do with these new changes don't hesitate

to give us a call.

In the meantime, I hope you have a safe and productive work week.