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 What is the FairPay Overtime Initiative
and how does it impact my business?
Ultimately, the US Department of Labor (DOL) proposed the FairPay Overtime Initiative in response to an increasing number of class action lawsuits from employees claiming unfair overtime regulations. Therefore, the DOL issued an extensive update of overtime exemptions, the first of this extent in decades.
The net is that to ensure all employees are classified correctly under the new definitions, employers will need to re-examine their workforce.
What changes should you expect?
Expect to pay more in overtime for some employees, in some cases the increase is as much as 36 percent. This is the largest increase since Congress passed the Fair Labor Standards Act in 1938.
Changes to the definitions of professional exemptions. New tests will be used to determine which employees should be classified as executive, administrative and professional which will determine who is exempt from overtime pay.
Some states are expected to issue their own overtime requirements, using the federal rule as a minimum standard.
What does your company need to do?
According to CCH, the leading provider of information services for business professionals, you can begin with the following checklist:
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Identify employees who earn less than $23,660 and more than $100,000. Evaluate whether your payroll costs will be best controlled by raising salaries to retain exempt status. Previously nonexempt high earners may likely be exempt now.
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Conduct job analyses. Determine which employees perform duties as defined by the new white-collar rule.
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Work closely with payroll. Make sure payroll is updated to accurately reflect exempt/nonexempt classifications, and that overtime is paid accordingly.
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Revise your discipline policy. Ensure your disciplinary policies reflect the changes to the no-docking rule.
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Avoid overtime overkill. You may now be able to require additional hours from certain employees without having to compensate the extra hours.
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Don't drop your guard. You may want to believe the rule revisions will ring in a new era of reduced wage-hour litigation. That's unlikely to be the case.
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QuickBooks Employee Organizer Can Help You Stay in Compliance with FLSA Regulations
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Up-to-date information on FLSA regulations-including the FairPay Overtime Initiative.
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Avoid common HR mistakes that can lead to costly penalties or fines.
Peace of mind by keeping federal and state employment laws, rules and regulations at your fingertips.
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