Top Banner
©2016  Compliance  HR.  All  Rights  Reserved. THE  FINAL  COUNTDOWN:  90  DAYS  TO  OVERTIME  COMPLIANCE  August  2016
32

Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

Apr 14, 2017

Download

Recruiting & HR

CHRJenn26
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Page 1: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d .

THE  FINAL  COUNTDOWN:  90  DAYS  TO  OVERTIME  COMPLIANCE  

August  2016

Page 2: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 2

Lori BrownPresident

ComplianceHR

Page 3: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 3

Page 4: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 4

Page 5: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 5

Quick Recap – What’s Changing in a Nutshell 

Steps to Compliance 

Using Navigator OT to Beat the December 1 buzzer

Q&A 

AGENDA

Page 6: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 6

EXEMPT  VS.  NON ‐EXEMPT

The Fair Labor Standards Act requires employers to pay “nonexempt” employees overtime pay for all hours worked over 40 in a workweek. 

“Exempt” executive, administrative, professional, outside sales and computer employees need not be paid overtime. To be exempt, employees must generally satisfy three tests:

Currently, employers must pay employees at least $455 per week (the minimum salary requirement) to qualify for the executive, administrative, and professional employee exemptions.

With very limited exceptions, the employer must pay employees their full salary in any week they perform work, regardless of the quality or quantity of the work.

To qualify for an executive, administrative or professional exemption an employee must meet specific duties tests.

1 Salary‐level test 2 Salary‐basis test 3 Duties test

Page 7: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 7

CHALLENGES  FOR  EMPLOYERS

Many employers struggle with properly classifying their employees as exempt or non‐exempt from overtime. 

The new rules  will likely exacerbate this struggle for many employers because they may be forced to reconsider classification of exempt employees whose salaries fall below the proposed minimum threshold.

70%

The DOL estimatesthat as many as 

of employers are not in full compliance with the FLSA.

Page 8: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 8

Tammy McCutchenVP Strategy, ComplianceHR

Littler Principal

Former Administrator, US‐DOL, Wage & Hour Division

Author, 2004 Revisions to White Collar Exemptions

Page 9: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 9

Effective Dec 1, 2016 Minimum salary level increase

Some bonuses and commissions can count toward the minimum salary level

Salary levels will be increased automatically every three years

WHAT ’S  CHANGING?

Page 10: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 10

$455 $23,660

$47,476$913

Current December 1, 2016

MINIMUM  SALARY  LEVEL

Page 11: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 11

Nondiscretionary bonuses, commissions and other incentive payments if paid at least quarterly can satisfy up to 10 percent of the minimum salary requirement

BONUS  &  COMMISSIONS

Page 12: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 12

Each workweek, the employer must pay the exempt employee a salary of at least 90% of the minimum salary level – $821.70 ($42,728.40 annualized)

At the end of the quarter, if that salary plus all bonuses and commissions paid during the quarter do not equal $11,869 ($47,476 ÷ 4), the employer has to make up the shortfall in the first pay period of the next quarter.

HOW  WILL  THIS  WORK?

Page 13: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 13

The salary levels will automatically increase every 3 years, beginning January 1, 2020

DOL estimates that the 2020 minimum salary level for exemption will be approximately $984 per week ($51,168 annualized) 

DOL will provide 150 days notice of the new salary levels before the January 1st effective date in the Federal Register and on the web at www.dol.gov/whd

AUTOMATIC  SALARY   INCREASES

Page 14: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 14

OPTION 1 Raise Exempt Employee’s SalariesIf you have exempt employees that are paid less than the proposed minimum, you can raise their salaries to the new requirement. If you elect this option, it is best practice to review their job duties to ensure they continue to qualify for these exemptions.

OPTION 2 Reclassify Employees as NonexemptIf exempt employees don't meet the new salary requirement, you can reclassify them as nonexempt and pay them overtime whenever they work more than 40 hours in a workweek. 

WHAT  ARE  YOUR  OPTIONS?

Page 15: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 15

The first‐of‐its‐kind, award winning suite of intelligent applications delivering expert guidance at internet speed and scale

THE  FLSA  SMART SOLUTION

Page 16: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 16

Salary or Overtime Pay?The OT Cost Estimator can help you decide:

How much will it cost to increase salary and maintain the exemption?

How much would it cost to pay overtime?

How can I minimize increases in labor costs?

OT  COST  ESTIMATOR

Page 17: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 17

OT  COST  ESTIMATOR

Page 18: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 18

WHAT ELSE DO I NEED TO DO?

1. Conduct a review to identify employees who may not meet the duties tests required for exemption

2. Develop new compensation plan for the reclassified employees

3. Review wage-hour policies and processes4. Communicate the changes5. Train the reclassified employees and their

managers

Page 19: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 19

Exempt or Non‐Exempt? Online exemption analysis 

Expert level guidance on exemption decisions

Assessment in as little as 15 minutes

Tool applies federal and state exemptions tests, and over 2,000 reported court decisions and DOL opinion letters

Provides suggestions to lower risk of misclassification 

NAVIGATOR  OT

Page 20: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 20

GETTING STARTED

Page 21: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 21

HOW   IT  WORKS

Page 22: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 22

BUILDING & TESTING THE APP

Page 23: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 23

SCREENING FOR EXEMPTIONS

Page 24: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 24

IDENTIFYING JOB DUTIES

Page 25: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 25

DETERMINING  DISCRETION

Page 26: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 26

FINAL  REPORTS

Page 27: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 27

ADDITIONAL  RESOURCES

Page 28: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 28

The new law provides a unique opportunity to get your house in order

Through traditional methods, exempt audits are costly & time consuming – can take up to 6 months

Change management/communications take time

Diagnose your vulnerabilities quickly and cost effectively

WHY  SHOULD   I  USE  NAVIGATOR  OT?

Page 29: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 29

Effective date for compliance

W

Use Navigator OT and OT Cost Estimator

DOL published the new overtime regulations

T IMELINE  &  NEXT  STEPS

Now

May 18, 2016

December 1, 2016

Page 30: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 30

QUESTIONS  &  ANSWERS

Page 31: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d . 31

TAMMY’S  GOLDEN  RULE

Page 32: Compliance HR Webinar: The Final Countdown: 90 Days To Overtime Compliance

© 2 0 1 6   C o m p l i a n c e   H R .   A l l   R i g h t s   R e s e r v e d .

THANK [email protected]