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Changes to the Fair Labor Standards Act may have effects on Overtime

10/28/2019

Even though I love Human Resources, I don’t love the rules and regulations that govern the employer/employee relationship. I can appreciate them and see their importance, yet it doesn’t make for great cocktail party conversations. Unfortunately, if you like employment law or not, depending where you live in the country, these regulations are changing quickly and may have an affect on your practice.

The US Department of Labor announced in September of this year an update to the Fair Labor Standards Act. If you are not familiar, the Fair Labor Standards Act (FLSA) established the minimum wage and overtime rules for employees. According to FLSA, you must follow the federal minimum wage, unless your state mandate is higher. Employers are expected to calculate overtime based on a 168-hour work week or 7 consecutive days (ex – Sunday through Saturday). Employees are eligible for overtime after 40 hours worked during this established week, unless your state mandate is more detailed. Businesses that have more than $500,000 in total gross revenue OR the business does interstate commerce are required to follow these rules. This includes receiving product from another state, like frames, contact lenses, supplies, etc. It also establishes who is eligible for overtime. Employees are either Exempt or Non-exempt. Non-exempt Employees are eligible for overtime, where Exempt employees are not. You can find more information about FLSA here: https://www.dol.gov/whd/flsa/

Federal Update to Fair Labor Standards Act:

In September, the US Department of Labor changed the earning threshold for exempt employees removing the exemption status for 1.3 million Americans and making them eligible for overtime. In addition to specific types of work or level of responsibility, an Exempt employee’s earnings now must be a minimum of $864 per week or $35,568 per year for full time. The previous standard salary level was $455 per week or $23,660 per year. You can find more information about this change here: https://www.dol.gov/whd/overtime2019/

Keeping up with these important rules of compliance keeps liability for the practice low and employee engagement high. New employees and old will appreciate your commitment to adhering to these standards.

AUTHOR

IDOC Optometry - Color Bar
Amy Alvarez

Amy Alvarez

Amy Alvarez, MS-HRM, joined IDOC in February 2018 as Human Resources Consultant. Amy has experience in Human Resources in healthcare and retail, Management in big box and specialty retail stores and Physician Recruitment. Through these roles and training, Amy is well-versed in recruitment and hiring strategies for “hard to fill” roles, dealing with low productivity, helping encourage employee engagement, on-boarding, training, day-to-day management in a retail setting, employee relations, and so much more.