New overtime rules are here

New overtime rules are here

The news is spreading far and wide. The rules for overtime are changing drastically for 2017 and beyond.

This article will not go into detail about the changes. Instead, we will focus on the steps every company needs to take in the next six months to prepare for compliance.

The steps are:

  1. Figuring out if the rules apply to your company/nonprofit. Read the DOL publication, “Overtime Rule and the Nonprofit Sector.”
  2. Identifying who in your organization is exempt and who is nonexempt based on two criteria: salary and duties. Find crucial information at the DOL website starting here.

Clarification: The rules aren’t so much about overtime, as they are about who is eligible for being paid extra for work over 40 hours a week. Many more people will be eligible, as the salary test is now $47,476.


3. Looking in your handbook to see if changes in their exemption status will change other conditions for employees, such as vacation accrual, etc.

4. Implementing a time tracking system for your nonexempt employees (and while you’re at it, exempt employees too)

5. Making changes to your payroll system if necessary. You do not need to convert exempt employees to an hourly pay, but you do need to use a proper method for paying for overtime hours.

On the bright side, many organizations needed to take a good look at their classifications. Getting these right reduces the overall risk for nasty audits and fines.

6. Communicating all of the above. Many employees will feel that not being exempt is a loss of status, even if it means more money.

7. Informing newly nonexempt employees about what they are authorized to do on cell phones, laptops and personal computers “after hours” and the expectation to report ALL hours worked.

8. Adjusting your 2017 budget.

9. Updating your Employee Handbook.


Post Tagged with , , ,

Leave a Reply