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Are you in Compliance with the FLSA Changes that Went into Effect on December 1st 2016?

Published: December 12, 2016

Considering the changing patterns of organizational management, ensuring the best interest of the employees, and pursuing measures to grant the employees their fair share of benefits from the organization, the US Department of Labor conducts a regular scrutiny of its rules and regulations.

The prime purpose behind this periodic vigilance is to foster an equally beneficial working environment that imparts a fair share of benefits to the employees and preserves their due professional rights. Time and again, the Department of Labor reviews the Fair Labor Standards Act (FLSA) and makes certain essential amendments as and when deemed necessary.

The US Department of Labor recently reviewed the overtime provisions of the FLSA. The recommendations proposed by the Department of Labor went into effect on December 1st and are likely to bring around 4.2 million exempt workers under the umbrella of overtime eligibility. Similarly, the new FLSA rules have changed the defining thresholds pertaining to the wage and pay scale which will affect the employment status of a huge number of employees. Here’s an overview of the revised thresholds and requisites in the new FLSA policies:

ü The revised FLSA policies have qualified regular employees as well as executives earning less than $47,476 per annum eligible for an overtime pay for each additional hour worked, aside from the 40 regular working hours per week.

ü The Department of Labor will revise the salary threshold after every 3 years. This implies that this year’s salary bar that has been raised to $47,476 will be revised in January 2020 and is likely to reach $51,000.

ü The FLSA has raised the threshold bar for the Highly-Compensated Employees up to $134,004.

The revised FLSA policies allow the organizations to compensate up to 10% of raised salary values in the form of bonuses and incentives.

Compliance Measures for the Organizations

Revise and Restrict Your Regular Functional Hours

Since a huge number of initially non-eligible employees have now become eligible for overtime pay, all additional hours worked will impose an additional cost in terms of overtimes on the organization’s compensation budget.

Temporary Recruitment in Special Positions

The organization may choose the services of freelancers or hire temporary employees for special and limited time job roles. Full-time and permanent recruitments in short term roles will entitle the employees for wages and perks similar to that of your regular workforce. This will reduce the efficacy of the recruitment process, decrease its value, and eventually making it more of a liability on the organization’s part.

Keep a Stringent Check on Your Processes

In a nutshell, the revised FLSA has put an additional compulsion to count and keep track of every extra hour worked and to compensate the employees for overtime accordingly. This exerts extra pressure upon the organizations to keep up with their performance and achieve their regular productivity goals within the regular functional hours.

This might turn out to be quite a challenge for the managers and supervisors to optimize their workforce’s performance. A smart approach to optimize performance and returns without having to work extra hours and paying overtime to your employees is to automate your regular workforce management processes through tech-based applications, such as a time and attendance system.

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