FLSA Changes: Get Your Act Together By December 1st

The Basics of FLSA

Let’s touch base on the basics of the Fair Labor Standards Act requirements for minimum wage and overtime.

1. A minimum wage (currently $7.25 an hour) *
2. Premium pay for overtime work (at a rate of 1.5 times the “regular rate” of pay for over 40 hours worked in a single workweek)
3. Certain recordkeeping, including accurate time records
4. Limitations on the employment of minors under 18

If you start from the position that people are going to be covered by this statute, unless an exemption applies, you’re going to always be better off when determining an employee’s exemption status. Exemptions are one of the focuses of the recent rule change. Let’s look at those in more depth.

*Note, if your state’s minimum wage is higher than the federal standard, your state’s rate takes precedence. 

What’s Changing?

Luckily, not everything. Many existing exemptions that you’re used to will stay the same. Let’s run through what’s new in the “white collar” exemption.

Employees that can fall into the “white collar” exemption include executive, administrative, professional, computer, and outside sales roles (including “highly compensated” employees). These positions must carry out certain job duties to qualify for the exemption and they must be paid on a salary basis.

Change: Effective December 1, 2016, the minimum salary threshold for the “white collar” exemption will increase to $913 per week ($47,476 per year). If an employee’s salary does not meet or exceed that threshold starting December 1, 2016 then this exemption no longer applies. This threshold will be adjusted every three years with 150 days’ notice.

Change: The total-annual-compensation threshold for “highly compensated employees” exemption will increase to $134,004.

What You Should Do

Don’t stagnate, automate! Auto dealers who have ditched their outdated manual compliance process in favor of workforce compliance automation are the ones best positioned to keep up on these types of changes quickly and minimize their exposure to risk.

With an automated workforce compliance system like Compligo, your exemption review can be a breeze because you’ll already have your employees grouped into exempt or non-exempt status groups. During your reassessment, you may find you need to update some job descriptions and exemption statuses or wish to make them consistent across locations or division. Well, we have good news for you, keeping your records accurate and your dealership happily in compliance is easy and straightforward with automation through Compligo.

Let’s run through a handful of the many ways automation can help your dealership:

1. DEFENSIBLE – An automated workforce compliance system is more scalable, accurate and defensible. Automation gives you reporting, dashboards, audit trails and attestations, so you’re always prepared for an internal or external audit.
2. EFFICIENT – Save time on a daily basis by having quick and easy access to workforce compliance information in a single system. Taking advantage of one, centralized compliance repository for employee exemption status and more, makes updating and implementing your policies across your company far easier.
3. FINANCIALLY EFFECTIVE – If a regulator comes knocking, they’re likely going to dig deep in their review or audit. The ability to furnish workforce compliance information in an instant keeps regulators happy, which may keep your legal costs down.