The DOL’s new overtime regs will make reviewing the classifications of exempt employees an absolute must for businesses everywhere. Luckily for most HR pros, this won’t be anything new.
At least that’s what a recent SHRM study uncovered. The study asked 337 HR professionals whether they review if their employees are exempt from overtime, and an impressive 94% of HR pros reported that they did.
Granted, the frequency with which HR pros review workers’ overtime status varies greatly. Here’s the breakdown of how often employee-status is reviewed by HR:
- When a position comes open (53%)
- Annually (39%)
- Monthly (2%), and
- Never (2%).
If you haven’t done so already, you’ll probably want to do an in-house audit of all your exempt employees to see if they’ll still meet that classification when the DOL’s new regs take effect.
Under the DOL’s proposed regs, employees must earn $970 per week or $50,440 per year, figures based on the 40th percentile of weekly wages for full-time salaried workers, to be exempt from overtime.
The current threshold is $455 per week or $23,660 per year.
Once you’ve done the in-house audit, you’ll still want to review those classifications regularly but, as employment attorney Robert Boonin points out, you don’t have to go overboard with conducting reviews.
So what’s going overboard? Reviewing classifications on a monthly basis. As Boonin told SHRM, monthly reviews would be “overkill,” because:
“If less often periodic reviews are performed correctly and thoroughly, it will be unlikely that jobs will change greatly from month to month so as to change the outcome.”
What’s the fallout?
SHRM also asked HR pros the impact they expected the new regs to have on their company and found:
- 76% of foresaw potential unbudgeted OT costs
- 70% expected an increase in opportunities for employees to earn overtime
- 61% saw the potential for less workplace and scheduling flexibility for employees, and
- 42% said there would be potentially fewer opportunities for career advancement in the company.