Changes to FLSA Regulations

 

Sports.  I'm a huge fan and this time is my favorite time of year.  Our favorite NBA teams will be heading to the playoffs (well...maybe YOUR favorite teams...I'm a Laker fan) and America's favorite pastime has had opening day in ball parks across the U.S.   I love the competition, the comradery, the feeling of being part of a team.  It's the ending of a new season and a beginning of another.  It's change and change is generally a good thing...generally...
 
As business owners you grow your businesses to be a great place to work, to be competitive and often government regulations make it difficult for you.  Unfortunately this year will be no different.  Coming right behind this year's changes in healthcare, sick pay and minimum wage law changes is a HUGE change to current FLSA regulations. 
 
What's FLSA? It's the Fair Labor Standards Act and it establishes minimum wage, overtime pay, recordkeeping, and youth employment standards for all companies in the U.S.  The big changes that are coming down the pike are FLSA's proposed regulation changes to who is exempt from FLSA overtime pay (aka who you have to pay overtime on and who you don't).  You've heard of the terms "exempt" and "non-exempt" which translate to "hourly" and "salary" (in most situations).  What you may not know isthere is testing, several questions to consider, that the U.S. Wage and Hour Division require when classifying someone as exempt or not, and the first test is how much they make per week.  Currently the amount is $455.00 per week.  That equates to an annual salary of $23,660 per year.  Here is where the change comes in... they are proposing to raise that to $970 per week or $50,440 per year.  So basically if an employee, who we deemed as exempt/salary, makes less than that amount, they would need to be classified as non-exempt and therefore qualifies for overtime pay.
 
I, like many of you, am not looking forward to this change much like I am not looking forward to Kobe Bryant's final game next Wednesday(again...I'm a HUGE Laker fan), but it's best if we are mentally and fiscally prepared for this change.  The government hasn't handed down the final changes or when it'll take affect but most likely it will be this year.  So let's be prepared together!  We can take a look at your employees' compensation and FLSA classifications.  We can help you evaluate if your employees are truly exempt from overtime and assist you in planning for these changes to come.
 
If you have any questions for our HR team regarding these or other matters, please feel free to reach out to us at HR@ishrplus.com.
 

By LeiLani Quiray, SPHR/Director of HR

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