The U.S. Department of Labor is expected to announce overtime rules addressing regulations that will significantly affect labor costs. The overtime protections will be extended to nearly 5 million white collar workers within the first year of implementation. With only 60 days to comply, employers will be expected to increase the salary level for “white collar” exemptions from the current minimum of $455 per week, or $23,660 a year, to $970 per week, or $50,440 annually. As a result, employees paid below the $50,440 threshold would be entitled to overtime on any work over 40 hours per week.
The proposed overtime rule is still waiting on approval from the OMB, but organizations should not wait to start preparing for the changes. There are serious consequences for non-compliance. NERA Economic Consulting reported that the average settlement payment could cost companies around $6.9 million.
What should organizations do to prepare for the FLSA changes?
Understand Federal and State Requirements