Kreis Enderle Hudgins & Borsos Employment Alert

Kreis Enderle Hudgins & Borsos Employment Alert

Article by Nancy Mullett

A proposed rule change from The Department of Labor could take effect later this month, and employers should take note of its impact.

The proposal would increase the exempt salary threshold for lower-level managerial and administrative positions. Currently, employees who make less than $455/week or $23,660/annually are eligible for overtime pay. The proposed increase would raise the salary threshold to about $47,000—less than the proposed rule’s original increase to $50,440.  In addition, the highly-compensated employee exemption salary threshold, which is now $100,000, would rise to $122,148 if the overtime rule is unchanged from the proposal. 

Employers need to carefully review how their exempt employees are classified both in terms of salary and duties. Employers may also need to restructure the way in which some employees perform their work.

For example, employees who work from home or telecommute and are classified as exempt may be required to work in-house on an hourly basis if they do not meet the salary threshold under the new rule. Employers who choose to continue with a plan for telecommuting should be very clear with employees about the expectations for work hours, reporting of hours and work product.

Finally, employers need to review the way in which employees report work hours to avoid a problem with employees underreporting now and filing a claim for payment of off-the-clock work later.

The Employment attorneys at Kreis Enderle are available to assist you with any questions or concerns you have as you navigate through the changes in the Fair Labor Standards Act. Feel free to contact us at 269-966-3000.

Posted on May 10, 2016
Tagged as Labor & Employment Law