You may have tried to put it out of your mind, but the thing that we have been dreading is right over the horizon. No, not the Presidential election. (Does anyone else miss the days of Jimmy Carter?) I am talking about the deadline for employers to increase the minimum salary for exempt employees announced by the Department of Labor in May. December 1, 2016 is the current deadline to increase the minimum salary to $913 per week, $47,476 per year. Since the deadline falls on a Thursday, employers will probably actually implement the new salary level in late November.
If you have not already finalized your plans for this increase, you need to get to it. If you have employees who are currently properly classified as exempt but who make less than $913 per week you can either raise their salary to at least $913 per week or get ready to track their hours and pay them overtime. (You will notice that I said “properly” classified as exempt. You will never have a better opportunity to evaluate why you have classified your employees as exempt and to correct any misclassifications. If you have made a mistake, this will be a good time to correct the mistake without writing in big red letters “WE MESSED UP ON YOUR PAY”. Call me if you want to discuss why I feel this way or how you can do this.)
If you opt to not raise an employee’s pay in order to maintain their exemption, you are going to have to educate them how to track their working time-ALL of their working time. For example, right now an exempt supervisor can answer phone calls and send emails after normal working hours and you don’t have to pay anything other than their usual salary. After December 1st this same person will be entitled to be paid for this time if she loses her exemption. That means that you will have to educate her on how she is to track and report her time so that you can pay her, and enforce your tracking practices. If the DOL, or a judge or jury, believes that you should have known that an employee was not properly reporting their working time, you will probably be the one to pay the price, not the employee.
As always, it has been a pleasure to perk up your otherwise languorous day.
Please contact Mr. Stovall directly if you need any assistance to prepare for this impending change.