New proposed DoL overtime rule released

A proposed Department of Labor rule would challenge overtime payment strictures.

Companies may need to change the HR software solution they use to manage overtime if a proposed rule from the Department of Labor takes effect. The department believes that 11 million employees across the country could feel the impact of its changes to the Fair Labor Standards Act , which would reclassify the employees who are eligible for overtime, among other changes.

New overtime rules may take affect within the foreseeable future as part of a Department of Labor proposal.New overtime rules may take affect within the foreseeable future as part of a Department of Labor proposal.

According to a National Law Review article by attorney Michael Arnold, the rule would affect both the future and the immediate present of overtime standards. Within the next two years, salary thresholds for both standard workers and "highly compensated employees" would increase by significant amounts, the former to around $50,440 and the latter to $122,000. What's more, future salary levels would be updated automatically every year to account for further necessary changes.

Arnold says the fact that the salary level was previously left unchanged for more than ten years is part of the reason behind the Department's decisions.

The rule would affect both the future and the immediate present of overtime standards

"Employers anticipating that their employees will be affected by the proposed rules may want to start planning now," he writes. "Reclassification will require an effective rollout plan, which will include proper documentation of the reclassification and careful implementation and training regarding modified recordkeeping and other policies affecting employees and their managers."

The DoL is currently looking for feedback on these possible regulations within the next 60 days, particularly in regards to the duties tests for exemption qualifications. This was notably not addressed in the proposed changes.

Even though the rules have yet to be finalized and likely wouldn't take effect for some time, HR consulting services are a good tool for preparing to change a system to be more compliant and efficient.