If your business and its employees are used to the old way
of doing things when it comes to overtime rules, it’s time to wake up! New
overtime rules have recently been released, and, unfortunately, the vast
majority of businesses aren’t aware of the new rules and/or don’t believe that
their businesses will be affected. Unfortunately, however, the statistics from
the United States Department of Labor, which estimate that over 4 million
workers will be affected by these new rules, don’t line up with those beliefs.
Under the new rules, the salary threshold is raised for many
executive, administrative, and professional employees, when it comes to being
exempt from the Fair Labor Standards Act. In December of this year, when the
new rules take effect, the threshold will raise a vast amount, from $455 per
week for exempt status to $913 per week.
It’s not just the salary threshold that will change either;
the total annual compensation requirement necessary for the highly compensated
employee exemption will also be raised. It’s moving from $100,000 per year to
$134,004 per year.
If you think that your business may be affected in the
coming months, then it’s time to take action now. With the help of a qualified
financial adviser, you need to look at how your business and its bottom line
may be affected by these changes and how you can avoid wage claims and other
potential problems. The good news is that you still have time to make these
changes and perform these preparations, so the sooner you get started, the
better.
Perform an Audit
One of the best ways you can prepare your business for the
rule change is to conduct an audit of all of your employees. This audit, which
should be conducted with the assistance of a tax adviser and/or compensation
specialist, should help you to know which of your employees will likely be
affected by the rule changes. Once you have a better idea of how big of a
change you are looking at, you and your helpers can more adequately prepare for
that change and take steps to reduce the negative impact of it on your business
and your employees.
Get the Right Tools Together
Another benefit of accurately understanding and evaluating
the impact that these new rules will have on your business is that you can
gather tools, such as compliance, time, and attendance software packages, that
can help you to avoid back pay and stay in line with the new overtime rules.
The bottom line is that this change is coming, whether you
want it to or not, and there is a good chance that, if you don’t prepare
properly, it could end up having a vastly negative effect on your business.
Don’t take that chance with the business you have built and with your
livelihood; start planning and preparing now for best results.