Compliance with the new dol overtime exemption rule may create unexpected challenges for employers _ the national law review

In May of this year, the U.S. Electricity and circuits class 6 Department of Labor (“DOL”) announced its final rule to increase the minimum salary for white-collar exemptions, effective December 1, 2016. Gas pains 6 weeks pregnant With less than two months to go before that new rule takes effect, employers still have time to decide how to address those otherwise exempt employees whose current salaries would not satisfy the new rule, by either increasing their salaries or converting them to non-exempt status. Electricity kwh to unit converter The New Salary Thresholds

Effective December 1, 2016, the salary threshold for the executive, administrative, and professional exemption will effectively double, increasing from $23,660 ($455 per week) to $47,476 ($913 per week). Gas and bloating after every meal This increase is but one of the changes that goes into effect on December 1.

The total annual compensation requirement for “highly compensated employees” subject to a minimal duties test will also increase from $100,000 to $134,004. Gas and bloating The salary basis test will be amended to allow employers to use non-discretionary bonuses and incentive payments, such as commissions, to satisfy up to 10 percent of the salary threshold. Electricity definition chemistry And the salary threshold for the white-collar exemptions will automatically update every three years to “ensure that they continue to provide useful and effective tests for exemption.”

On first glance, dealing with the increase in the minimum salaries for white-collar exemptions would not appear to create much of a challenge for employers—they must decide whether to increase employees’ salaries or convert them to non-exempt status. Gas city indiana Many employers that have already reviewed the issue and its repercussions would likely disagree with the assessment that this is a simple task. Hair electricity dance moms The decisions not only impact the affected employees but also affect the employers’ budgets and compensation structures, potentially creating unwanted salary compressions or forcing employers to adjust the salaries of other employees.

In addition, converting employees to non-exempt status requires an employer to set new hourly rates for the employees. J gastroenterol hepatol impact factor If that is not done carefully, it could result in the employee receiving an unanticipated increase in compensation—perhaps a huge one— or an unexpected decrease in annual compensation. Gas dryer vs electric dryer singapore The Impact on Compensation Structures

For otherwise exempt employees whose compensation already satisfies the new minimum salaries, nothing need be done to comply with the new DOL rule. Electricity of the heart But that does not mean that those employees will not be affected by the new rule. Gas zombies Employers that raise the salaries of other employees to comply with the new thresholds could create operational or morale issues for those whose salaries are not being adjusted. Electricity examples It is not difficult to conceive of situations where complying with the rule by only addressing the compensation of those who fall below the threshold would result in a lower-level employee leapfrogging over a higher-level employee in terms of compensation, or where it results in unwanted salary compression. Electricity experiments Salary shifts could also affect any analysis of whether the new compensation structure adversely affects individuals in protected categories. Gas in oil A female senior manager who is now being paid only several hundred dollars per year more than the lower-level male manager might well raise a concern about gender discrimination if her salary is not also adjusted. Electricity lessons for 5th grade The Impact of Increasing Salaries

For otherwise exempt employees who currently do not earn enough to satisfy the new minimum salary thresholds, employers have two choices: increase the salary to satisfy the new threshold or convert the employee to non-exempt status. Mp electricity bill pay indore Converting employees to non-exempt status can create challenges in attempting to set their hourly rates (addressed separately below).

If, for example, an otherwise exempt employee currently earns a salary of $47,000 per year, the employer may have an easy decision to give the employee a raise of at least $476 to satisfy the new threshold. M gastrocnemius But many decisions would not be so simple, particularly once they are viewed outside of a vacuum. Gas block dimple jig What about the employee earning $40,000? Should that employee be given a raise of more than $7,000 or should she be converted to non-exempt status? It is not difficult to see how one employer would choose to give an employee a $7,000 raise while another would choose to convert that employee to non-exempt status.

What if the amount of an increase seems small, but it would have a large impact because of the number of employees affected? A salary increase of $5,000 for a single employee to meet the new salary threshold may not have a substantial impact upon many employers. Electricity in costa rica But what if the employer would need to give that $5,000 increase to 500 employees across the country to maintain their exempt status? Suddenly, maintaining the exemption would carry a $2,500,000 price tag. Gasco abu dhabi contact And that is not a one-time cost; it is an annual one that would likely increase as the salary threshold is updated. Inert gas definition chemistry The Impact of Reclassifying an Employee as Non-Exempt

If an employer decides to convert an employee to non-exempt status, it faces a new challenge—setting the employee’s hourly rate. Gas in babies home remedies Doing that requires much more thought than punching numbers into a calculator.

If the employer “reverse engineers” an hourly rate by just taking the employee’s salary and assuming the employee works 52 weeks a year and 40 hours each week, it will result in the employee earning the same amount as before so long as she does not work any overtime. Electricity magnetism The employee will earn more than she did before if she works any overtime at all. Gas bijoux discount code And if she works a significant amount of overtime, the reclassification to non-exempt status could result in the employee earning significantly more than she earned before as an exempt employee. Electricity production by state If she worked 10 hours of overtime a week, she would effectively receive a 37 percent increase in compensation.

But calculating the employee’s new hourly rate based on an expectation that she will work more overtime than is realistic would result in the employee earning less than she did before. Electricity distribution companies If, for instance, the employer calculated an hourly rate by assuming that the employee would work 10 hours of overtime each week, and if she worked less than that, she would earn less than she did before—perhaps significantly less. Gas quality comparison That, of course, could lead to a severe morale issue—or to the unwanted departure of a valued employee.

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