Changes to overtime laws start Dec. 1

Published 6:37 pm Friday, September 30, 2016

In preparation for the changes to the Fair Labor Standards Act that will go into affect on Dec. 1, the Bainbridge/Decatur County Chamber of Commerce held a lunch and learn for local business leaders on Wednesday.

The speaker was Jason Willcox of Moore, Clarke, DuVall and Rodgers out of Albany. He specializes in labor law litigation.

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The major change to FLSA is the change in minimum weekly salary for employees to be eligible for an overtime exemption. Currently, employees that make more then $455 a week and meet certain strict duties tests are exempt from overtime pay and can receive a flat salary regardless of the hours worked. Under the new law, the duties tests are not changing, but the minimum salary will increase to $913 a week or $47,476 annually.

“This change was a little under what the proposed change was because it was $921,” Willcox said.

Some professions are exempt from these standards including, but not limited to teachers, outside sales representatives and farm workers. The duty and salary tests for overtime exemptions only apply employees in “white collar” professions.

“Blue collar” workers, which is defined as workers who perform work involving repetitive operations with their hands, physical skill or energy, cannot be classified as exempt from overtime and must be paid at least minimum wage and overtime at a rate of time and a half for any time exceeding 40 hours in a single week.

“You cannot have someone that is involved in primarily manual labor that is exempt from the rules. No matter what you pay them,” Willcox said. “I don’t care how much you pay someone that individual still has to meet the duties test.”

Willcox recommends that all businesses audit each of their employees to see if they meet the new exemption tests in preparation for the implementation of the changes. He laid out a series of changes that can be made if currently exempt employees are found to not be in compliance with the new rules Willcox.

The first was to raise the compensation of the employee in question to $913 to meet the new standard. His recommendation was to consider this option if the employees current pay was already close to that level and the change in base pay would be cheaper then the amount paid in overtime.

The second option was to reclassify employees as salaried non-exempt or to non-exempt hourly pay. When setting the employees new per-hour wage he suggested taking into account the projected amount of overtime hours he or she will be working.

The third suggestion was to look into restricting of job duties.

“Analyze what this is going to cost,” Willcox said. “Am I better off having two people that work 30-hours or if I have somebody that is really efficient, but they’re going to work 50-hours, which one is better for [my business].”

Under the current law, no changes are being made to the new duties test.

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