In the latest update with the Department of Labor, the overtime rules of the workers needed rectification to protect the rights of the employee. In the recently updated overtime rules of DOL, he government suggested an increase in the threshold of the annual salary of the employees who were exempted from the Overtime pays as per the regulations.

The older version of the rules stated that employees earning $455 per week or $23660 annually shall be exempt from overtime pays. However, the new regulation has increased the threshold limit from $455 to $913 per week. This is a considerable increment in the Overtime rules, as the employers who were paying their manager $25000 annually and were working for 50 hours a week, were exempt from the overtime. Hence, there was a saving in the cost of the employers.

With the new rule, employers have only two options-

Either to raise the pay scale of the employees so that they get exempt from Overtime rules or

To pay the overtime for hours worked for more than 40 hours of work.

Many HR services companies are because the staffing expense of the employers will increase, however, the overtime pay will be necessary as the Law also gives rights to the employees to file lawsuits against employers who fail to pay overtime.

Here are 9 point Checklist for employers to understand the impact of new Overtime Rules on their business.

Determine the impact of Rule

The employers must understand the implications of the New Rule on the business. Make sure that your business falls under the scope of Law to avoid unnecessary lawsuits.

Conduct the Review Audit

The review audit will help employers to determine the number of employees they have for consideration and whether they fall in the exempt criteria.

Tracking the Employees Work Time

This procedure is essential to do as it will give you an estimate of the work timings of the employees and their overtime hours.

Classifying number of Employees in the non-exempt criteria

With the Audited figures and estimated work hours of the employees, classify the number of employees that fall in the standards of non-exempt.

Develop a Financial Plan

In order to understand the staff’s salary expenses. The employers must develop a financial plan as which employees are required to work more than 40 hours a week and what impact will it have on productivity.

Policy for Time tracking

Develop a strategy for tracking the working hours for the employees. Review the check-in and check-out times with the HR department.

Train for Policies

Employees need to train their employees as to how they keep track of the work time and overtime schedule.

Communication with the Employees

It is the duty of the employer to communicate changes in the system to the employees. The communication should be done in a positive way.

Prepare for the Expense account

Employers who are likely to be affected by the policy change and new Law should prepare for the possible scenario of expense. The decision should be taken for finance.