The U.S. Department of Labor recently released their final ruling on overtime pay under the Fair Labor Standards Act. The new regulation increases the threshold for additional compensation eligibility to $913 per week or $47,476 per year. This means workers who make more than this amount will not qualify for overtime pay. This federal notice increases the previous cap – $455 per week or $23,660 per year – which went into effect in 2004. In addition to the new rule, which companies will have to abide by starting December 1, the DOL put a mechanism into place that will automatically change the overtime salary threshold every three years.
While the government believes the regulation will improve the health of employees – they believe businesses will be less likely to overwork people if organizations have to pay them extra money – it also comes with its own list of issues. Let's take a look at some of the more serious consequences of the overtime ruling:
Moonlighting
Employers may be hesitant to hire more workers to avoid paying existing employees overtime. As a result, people may see their hours reduced or human resources teams paying closer attention to the amount of time spent in the workplace, CNN Money suggested. Employees may then pick up another job to help balance the loss of additional wages they would've received from overtime pay, according to the Society for Human Resource Management.
This action will only add stress to workers, an outcome the DOL strived to overcome with their overtime ruling. Moonlighting – or working more than one job – can put employees' health at risk. But is an extra obligation worse than working additional hours at one's only job? Time will tell, as more reports regarding overtime thresholds are released in the months ahead.
Taking on more than one job can result in added stress for employees.Necessity of time and attendance software
Dealing with the new overtime regulation can be overwhelming for employers, especially if they're not well-equipped to handle the alteration. To streamline the process of recording the number of employees eligible for additional pay, companies can implement time and attendance software. This solution can keep track of employee hours on a daily, monthly, quarterly and yearly basis, helping businesses maintain control over their budgets and ensuring that workers aren't stealing time.
Introducing these kinds of systems are not only a strong step for companies to complete accurate ACA reporting, but also to document the amount of time someone has worked. With this software, company leaders can make sure employees are exceeding their limits in an attempt to earn overtime.
Triton HR offers organizations consulting services to assist in the transition to the new overtime rule. Furthermore, the company can provide efficient time and attendance software for accurate records of employee's time of the job.