New Changes To The FLSA Exempt Status In Effect Dec. 1, 2016

New Changes To The FLSA Exempt Status In Effect Dec. 1, 2016

Posted by Jada Jacobs on 6/29/16 9:30 AM
Jada Jacobs
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Posted on: June 29, 2016

The anticipated and controversial changes to the Exempt status as defined under the Fair Labor Standards Act (FLSA) are in!  The effective date of the final rule is December 1, 2016, with future automatic updates every three years beginning January 1, 2020.  A few highlights to the Final Rule include updating the salary and compensation levels for Executive, Administrative and Professional workers as defined under the FLSA.  

Here is an overview with details from the Department of Labor that we found on their website:
  1. Increases the current standard salary level of exempt compensation from $455 weekly (annualized at $23,660) to the new $913 weekly (annualized at $47,476)
  2. Increases the current highly compensated employee (HCE) from $100,000 annually to $134,004
  3. Establishes automatic updates to the salary and compensation levels every three years beginning January 1, 2020 

A few important keys as we all prepare for December 1st is to review the following:

  • The status of your current employees
  • Hours worked
  • Assigned duties
  • How their time is tracked (both exempt and non-exempt)
  • How you pay their compensation
Remember, this change impacts overtime eligibility and pay.  Its critically important to start with evaluating individual positions in an effort to properly classify each, develop how you are tracking hours worked and policies supporting timekeeping requirements and how will you communicate the changes.

Should you have concerns or want to discuss the Final Overtime Rule and your company's position, please call your Propel HR team.  We're here to assist you.

Topics: Featured, Human Resources, FLSA, Compliance

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