Navigating the New Rules on Overtime Pay
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Navigating the New Rules on Overtime Pay

Ed Wenck
Oct 18, 2016

CEDIA® and Ice Miller’s webinar on changes to the FLSA

As you’re likely aware, there are big changes coming to the U.S. Fair Labor Standards Act regarding who is and who isn’t exempt from overtime pay. The low end of the threshold — a weekly salary of $455 — bumps up significantly come Dec. 1. From that point forward all employees (working for businesses that gross more than $500K annually) will be entitled to overtime pay if they’re making $913 per week or less.
Simply put, if you have an employee making anywhere from minimum wage to $47,476 a year, they’re entitled to overtime when they work more than 40 hours a week.

Naturally, this covers a broad range of white-collar workers who, in the past, did whatever a job required without clocking in and out or documenting the time they spent beyond the nine-to-five workday. Although a number of parties have lobbied against the legislation (and counter-legislation has been offered), the experts expect those efforts to fail, and the FLSA changes will kick in on schedule.

One of those experts, Tami Earnhart, is a partner at the law firm of Ice Miller (specifically handling duties with Ice Miller’s Labor and Employment group). Earnhart conducted a webinar for CEDIA members recently, and you can find the hour-long recording of that presentation here. (The accompanying PowerPoint lives at this location.)

In addition to explaining the obvious legal impacts of this legislation and how to navigate them — yes, that time an employee spends answering emails on her cell phone counts — Earnhart dug into some of the hidden morale issues that might confront employers.


Beyond the new rules, there are a lot of purely logistical options to consider.



Specifically:

Say you’ve decided it’s most cost-effective (or less troublesome) to give a particular employee a raise — even if they’re not one of your rock stars. How does that employee’s supervisor take the news? Are you creating a de facto domino effect up the chain of command in order to keep everyone happy?

OK, so how about making everyone an hourly employee? The potential problem here is one of traditional cachet — are your formerly salaried professional folks going to interpret the move as akin to a kind of demotion, if only in perception and not pay?
What about splitting the work? Keeping a 40-hour employee at their current level and adding a part-timer? How tough is it to find that quality half-time worker — and have you left the full-time employee feeling ripped off?

As for the legalese you’re about to crack open, we’ll let Earnhart do the talking. Beyond the new rules, there are a lot of purely logistical options to consider, whether you plan to limit hours or build fluctuating workweeks for employees that ebb and flow with your business cycles. And to complicate matters further, individual states have their own laws regarding exemptions in addition to the federal guidelines. No matter how you navigate the change, though, that change is coming — quickly.




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CEDIA blog posts are intended to provide general information and should not be regarded as legal opinions or advice.

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