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05/17/2016

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I believe that many employers will simply refer to the reclassified employees as nonexempt salaried not hourly to provide some cover. Who knows how sensitive people will be if they were called hourly? It's not the company' s idea.

Margaret's warnings are quite timely. Major shifts in overtime eligibility will also disconcert supervisors whose current problems with OT control will only get worse under new rules. Used to send my security guard force through the Rexall HQ building after day shift ended to chase out all the nonexempt salaried computer programmers working after hours without authorization. As Donny noted, the change will affect many whose fixed salaries never flexed before per hours spent. Their bosses must now closely control time as well as output quality. Are they ready?

I'd like to know, how far off are the salaries in question from the new regulations? It seems mostly the retailers and restaurant managers who might be in the greatest jeopardy. I also read the southern states where compensation is lower are also the greatest impacted area - that must be on where the 40th percentile figure is based.

With 10% of bonus/incentives counting towards the threshold, salary could be $4k lower for example - so will that help or not?

I think companies need to look at how many hours people are actually working - this is the real issue. If a manager is putting in 70 hours with no additional compensation for a long period of time, that is not what a salary based on 40 hours/week is meant to cover. If 60-70 hours is the norm, the salary should be based on that. OR a part time role could be created to work the extra hours which provides more income for someone else.

Either way the money would be spent though so companies need to figure out how to best invest their dollars.

We don't have a lot of benefits and perks given only to salaried exempt workers so that is not an issue here. Traditionally that was done in lieu of extra pay so if there is extra pay now, then benefits could perhaps be standardized. That would help dissuade some satisfaction.

From my experience once people start thinking like a nonexempt hourly or salaried person, they like being paid for every hour worked. I wouldn't mind as long as the hourly rate was commensurate with my current salary level at 2080 hours.

I think it's the loss of other benefits and the flexibility to work as needed that has more of an impact so I would look to reduce those differences.

From the state by state breakdown posted on the White House website:
"Tomorrow, the Department of Labor will finalize a rule that will extend overtime protections to 4.2 million workers within the first year of its implementation. It does so by raising the salary threshold under which most white college salaried workers are eligible to receive overtime pay
from $455 a week ($23,660 a year) to $913 a week ($47,476 a year). The rule goes into effect on December 1, 2016. This table below provides breakdowns of the 4.2 million workers who will be affected by state and demographic group."

Anyone else see the typo and wonder what's up?

Hi everyone and thanks for the comments. The final regs were announced today, May 18 and compliance is due December 1. Here is SHRM's summary: http://bit.ly/1OIxqjf and here is the NYTimes take on the change http://nyti.ms/22g6ObE.

A couple of things to keep in mind:

-The new overtime cutoff is $47,476
-The cutoff will be increased every three years
-Keep the complexity of this change clear. As Karen pointed out above, you could imagine that affected employees would now be glad to earn more money via overtime. But their expectations are going to be dashed if, as Jim pointed out, their department enforces no-overtime rules.
-Other mixed messages may come when you expect the same productivity from them by working fewer hours than they have in the past.
-Be sure to talk with those affected before and after the rule change. They will have high expectations for income improvement that need to be kept realistic.

I really don't see it as a big deal for employees. Will they be working more hours for less pay? Not sure they will. Too much handwringing.

Margaret's update comments are right on target. Employees should NOT be working more hours for less pay but the contrary -- the new rule guarantees more workers time and a half overtime when worked. That's a big WHEN, because control over their hours was never before a critical issue for those newly eligible ees or their bosses until now.

Change brings anxiety at all levels. Justified, because many companies will fumble, blunder and be fined.

Productivity should fall while outsourcing will increase and automation should expand, as labor costs are artificially inflated by government edict. When human work hours become more expensive than the market demands, other operational cost efficiencies will be pursued.

(I went to some black colleges rather than white ones, myself.) ;-)

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