The new overtime provision in the Fair Labor Standards Act was scheduled to go into effect on Dec. 1, 2016, a measure that would provide time-and-a-half pay to employees earning $47,476 or less annually. However, before companies were required to comply, Amos L. Mazzant III, a federal judge in Texas, brought the change to a halt by filing an injunction. As a result, the law is in limbo awaiting hearings. What does this mean for human resources professionals trying to prepare for any outcome? Let's investigate.
How FLSA updates impact businesses
The new rule has been dubbed the "white collar overtime" law because it mostly impacts employees who formerly held exempt status. Should the updates still go into effect, many salaried workers would have to track their hours carefully. What's more, to save money, many companies would have to approve overtime, preventing some from working outside of 40 hours each week. However, some employees want to work extra hours to ensure they meet deadlines or finish their work.
According to Gallup, two-thirds of employees noted that mobile technology has increased the amount of time they work outside of normal hours. If FLSA updates pass, this means companies will have to find other ways of getting work done, whether that means raising salaries so employees don't have to log hours or approving overtime.
Steps HR professionals should take
Most HR professionals have already worked out these and other kinks with their companies. The injunction wasn't filed until Nov. 22, 2016, so many businesses already had compliance plans in place. For instance, preparing for the updated standards might include the following:
- Increasing salaries above the threshold in instances where employees often work overtime.
- Creating or implementing time-tracking systems for non-exempt employees to tally their hours.
- Updating statuses on records.
- Reviewing job descriptions across companies.
- Revising business overtime policies, such as seeking approval to work beyond 40 hours.
If your company has already put plans into action, stay the course. The Department of Labor made an appeal, requiring briefs be delivered to the court by Jan. 31, 2017, according to HR Daily Advisor. This means updates in the case should be forthcoming. As such, many HR professionals opted to have their ducks in a row in case the FLSA updates go forward – it's better to have the infrastructure in place and not need it than have no plan set up and be required to comply.
Take this time during deliberations to hone your company's strategy. Continue reviewing employees' job duties and compensation, and honing on your overtime policies and work assignments. If you need additional support, Triton Benefits and HR Solutions offers HR consulting on long- or short-term assignments.
In addition to preparing for the possibility that overtime caps do rise, HR professionals should keep their eyes on the Fifth Circuit Court, Congress and the president-elect. Even if this injunction fails, a Republican-dominated Congress could work to strip the FLSA movement.