Making Sense of The Department of Labor's New Exemption Laws
If you heard a loud scratching sound on Wednesday, May 18th of this year, it likely was coming from the heads of business owners around the state of Oklahoma. Once again, the United States Government has changed the rules of employment and compensation and the burden of compliance with these new rules rest squarely on the shoulders of business owners. This time, the change is regarding the rules of overtime pay, and which of your employees are required to receive it. If you think you know, read on and follow the links so that you can be sure, because the rules have changed.
If you’re like many other business owners, you may be feeling like your very existence is being attacked by new regulations! I understand how you feel, but rest assured that you do not have to be beaten down with these things. Whether or not this regulation will accomplish the noble cause it was created to remedy is one conversation, but the more important one that is on your mind is how you are going to deal with it in the most compliant and least disruptive way for your business.
Here is a process that you can follow in order to get a handle on your current situation and control the change in order to remain compliant when these laws go into effect on December 1st.
STEP 1 - Identify
- There are several “tests” to determine whether or not an employee should be paid a salary, or paid by the hour, it is most certainly not an arbitrary decision.
STEP 2 – Analyze
- A thorough analysis of past hours will help you navigate the future. Whether you have real timeclock data or simply employee interviews available to you, a reasonable estimate of the cost of re-classifications from salary to hourly, or vice versa should be achieved.
STEP 3 – Strategize
- Creativity in compensation can be a very good thing, as long as it makes sense. Your strategy must consider each employee, yet be consistent throughout your organization so as to avoid discrimination. Putting together a plan that allows you to predict your cost is the top priority.
STEP 4 – Communicate! Communicate! Communicate!
- Avoiding is a bad plan, trust me. The sooner you communicate, the sooner you will arrive at your strategy. By giving yourself some time, you can also consider the ideas that come from your employees. You know how to best communicate with your team, do it!
Chances are you have at least one employee who is affected by this change, so you owe even that one employee a proper evaluation in order to make the change as seamlessly as possible. I have included some resources for you to use as you go down this road. You have approximately 90 days to evaluate, analyze, strategize, and communicate these changes to your employees, so there is no time like the present to get started!
Caleb Martin is the Founder and CEO of Alliant HR Outsourcing. Alliant helps small business owners eliminate the guesswork in hiring, training, and building their competitive advantage, their people.
You can visit their website at www.allianthro.com