The Department of Labor (DOL) is implementing significant changes to the Fair Labor Standards Act (FLSA) overtime rule. These updates will impact businesses of all sizes, particularly those with salaried employees. Let’s break down the key points:
When Do the Changes Take Effect?
The new overtime rules will be phased in over two steps:
- July 1, 2024: The salary threshold for exempt employees increases from $35,568 to $43,888 per year.
- January 1, 2025: The salary threshold rises again to $58,656 per year.
The annual compensation requirement for highly compensated employees will also increase to $151,164 on January 1, 2025.
- July 1, 2027: The threshold will increase again, and there will be another increase every three years.
Who’s Impacted?
These changes primarily affect salaried employees who earn less than the specified thresholds. Once the new salary levels take effect, these workers will become eligible for overtime pay if they work more than 40 hours per week.
What Does This Mean for Businesses?
- Increased Labor Costs: Many businesses will experience increased labor costs as more employees become eligible for overtime.
- Reclassification of Employees: Some salaried employees may need to be reclassified as hourly workers to comply with the new regulations.
- Compliance Challenges: Ensuring accurate time tracking and payroll processing becomes even more critical.
What Systems can Help?
Navigating these changes can be complex, but the right staffing software can streamline the process. A robust system can:
- Manage employee classifications: The software can help classify employees as exempt or non-exempt based on predefined criteria, such as salary, job duties, and hours worked.
- Accurate recordkeeping: Maintain detailed employee records, including job titles, wages, and overtime hours, ensuring compliance with recordkeeping requirements.
- Time tracking: The software can accurately track employee hours worked, including start and end times, breaks, and overtime.
- Overtime calculations: Automatically calculate overtime pay based on the employee’s regular rate and hours worked, reducing manual errors. Prevent disputes and ensure correct overtime calculations.
- Compliance alerts: The system can generate alerts for potential overtime violations, helping to prevent issues before they arise.
- Report generation: The software can generate various reports, such as time and attendance reports, overtime reports, and payroll summaries, for internal use and compliance audits. Provide insights into labor costs and overtime expenses.
- Audit support: The software can generate reports and data to support compliance audits and investigations.
By leveraging these features, COATS Staffing Software can significantly enhance your ability to comply with the FLSA overtime regulations and reduce the administrative burden associated with managing employee time and pay.
Are you prepared for the FLSA overtime rule changes? COATS Staffing Software can help you navigate this transition smoothly. Contact us today to learn more about how our solutions can support your business: 1-800-888-5894.
Disclaimer: This blog post is intended for informational purposes only and does not constitute legal advice. Please consult with an employment law attorney for guidance specific to your business.