Newspaper Page Text
Page 16 October 15, 2023 StarNews www.starnewsgaonline.com
U.S Department of Labor’s revisions to overtime
regulations: 50% increase in overtime pay threshold on tap
s^Marcy
i HEATH
678-821-3508
4marcy@be
inoventive.com
The U.S Department of Labor has finally
unveiled its highly anticipated proposed
revisions to the overtime regulations affecting
American workers. These proposed changes
entail a substantial increase in the threshold for
exempt status, exceeding $55,000, marking a
rise of over 50%.
In accordance with the DOL’s existing
regulations, employees falling under the
exempt category, typically encompassing
managers, executives, and specific
administrators, must earn at least the current
threshold amount of $35,568. Should the new
threshold be implemented, employers will be
confronted with a decision: either increase the
salaries of their current exempt employees to
meet the new threshold or reclassify them as
non-exempt. In the latter case, these workers
would be entitled to overtime compensation,
usually at a rate of time and a half, for any
overtime hours worked.
There is speculation that this proposal is
moving swiftly through the process and could
become a pennanent regulation within the next
two months. This timeline leaves employers
with a narrow window to implement any
necessary adjustments.
What’s Changing: • The exempt salary
threshold will increase to $1059 per week or
$55,068 per year. That’s up from the current
$684 a week or $35,568 a year.
• The exempt salary threshold will
automatically increase every three years based
on cost-of-living increases.
• The proposal will raise the threshold for the
“highly compensated employee” exemption to
$143,988 from the current threshold of
$107,432. The job title alone does not confer
“exempt” status upon an individual. To classify
a worker as exempt from overtime pay, a two-
part test must be applied:
1. The salary threshold, which cannot exceed
$55,068 annually, as per the rule.
2. The duties test, which specifies the precise
job responsibilities required to qualify for
exempt status.
The Duties Test: A worker must have certain
duties to be an exempt employee. The three
main exemptions are:
Executive exemption: These employees
must manage a department or division, direct
the work ofat least two workers and have the
authority to hire and fire.
Administrative exemption: Primary duties
must be office or non-manual work related to
themanagement or general business operations,
and the employee’s duties must include
exercisingindependent judgment on significant
issues.
Professional exemption: The employee’s
primary duty must be the performance of work
requiring advanced knowledge, predominantly
intellectual in character and which requires the
consistentexercise of discretion and judgment.
How to Prepare: Begin by compiling a
roster of your existing exempt employees
whose annual earnings fall within the range of
$35,568 to $55,068. Each of these employees
will necessitate a strategic choice:
1. Either increase their salaries to align with
the new threshold.
2. Or reclassify them as non-exempt,
enabling them to receive overtime
compensation for any extrahours worked.
Additionally, you will need to establish
robust systems for monitoring their hours
worked, whichincludes tracking overtime
hours accurately.
Furthermore, it’s important to consider that
your benefits package may vary between non-
exemptand exempt employees, and
adjustments may be necessary for individuals
whose status changes.
Additionally, devising a communication
strategy to effectively convey these changes to
yourworkforce is cmcial.
Lastly, anticipate potential opposition to this
rule from business associations, with the
possibility oflegal challenges aimed at halting
its implementation. For more infonnation, call
me at 678-821-3508.
Have a
fjoptiful
A RCO
Vdid/ !
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