FEDERAL OT REGS COMING SOON...REALLY

The long awaited changes to the FLSA Overtime rules are one step closer to becoming the law. The Final Rules were sent to the White House's Office of Information and Regulatory Affairs (OMB) on Tuesday. The law could still take weeks or even months to be released, but that seems highly unlikely given the timing of this release.

If the OMB follows its normal review timeline, the Final Rules should be approved in four to six weeks. This means we will see the new overtime regulations by early- to mid-May.

Why the sudden confidence that we will actually see these proposed rules in May? According to recent calculations by the Congressional Research Service, if the DOL's overtime rule isn't released by the OMB by May 16, the rule will be at the mercy of the next Congress and president. These overtime regulations are viewed by this administration as a major achievement, a Republican president would almost certainly veto them.

Despite the sped up timeline, the DOL has not given any indication that it intends to extend the length of time it will take for the rules to take effect. It still appears that the plan is for the rules to take effect 60 days after being published. This means employers will have 60 days to reclassify employees or raise salaries.

We recommend:

Audit your job classifications now. If you have employees earning less than $50,440.00 per year, start exploring a change. One option is to re-assign non-essential duties, reclassify as nonexempt, and limit overtime opportunities. Another is to add additional duties and be prepared to raise the salary in order to maintain the exempt status.

There is a chance the DOL will adopt a lower salary threshold, some have suggested $40,000, but the only firm number we know at this point is the $50,440.00 published in the proposed regulations. We recommend being prepared for the worst, while hoping for the best.

Audit job descriptions. There is a chance that the Final Rules will also feature a new duties test. The test the DOL is considering is known as the California Test, and it is a more straight forward test. Under the California test, if an employee spends more than 50% of his or her time on exempt duties, he or she is exempt.

Even if the new duties test is not adopted, no employer will regret performing an audit of job descriptions. A well written job description that accurately reflects the essential functions of a position is a great tool for a wide variety of functions ranging from performance reviews to disability claims.

This may seem complicated but trust us, this is our day job. We perform loads of audits every year--anything to do with the workplace. Questions? We can help.