The Department of Labor’s recently promulgated revisions to its regulations under the Fair Labor Standards Act (FLSA) governing the FLSA’s so-called “white collar” overtime pay exemption will create a new universe of previously FLSA-exempt salaried workers. The new regulations, which double the weekly salary threshold for determining whether a salaried worker is automatically eligible for overtime — from $455 to $913 — go into effect on December 1, 2016.
Regardless of their job duties, workers within this group will now be classified as non-exempt and eligible for overtime pay. One common example of how the new rule will work in practice is its impact on part-time salaried employees who would be exempt if employed full-time, but because of their reduced schedules will not meet DOL’s new $913 weekly salary threshold and thus must be classified as non-exempt.
As a result of the new rule, employers may wonder if they can continue to pay newly classified non-exempt workers on a salary basis, or convert them to hourly-paid employees.
Nothing in the FLSA or the DOL regulations requires an employer to pay non-exempt workers only on an hourly basis. And while hourly pay is the most straight-forward and easiest way of paying employees who must be reclassified as non-exempt because of the need to track their hours, there are other options. However, these options can be complicated and burdensome to implement, and employers should have good reasons for using them.
Members of the Equal Employment Advisory Council (EEAC) can read more here.