If you own a business or manage employees, you may already know that the implementation of the Fair Labor Standards Act (FLSA) will change on December 1, 2016. If you are not up to speed, you can learn more about the changes here.

The two most significant changes to the FLSA are that (a) in order to qualify for the administrative, executive, or professional exemption an employee must receive $913 per week (up from $455 per week) and (b) in order to qualify for the highly compensated employee exemption an employee must receive $134,004 per year (up from $100,000 per year). Both of which will have a significant impact on wage and overtime obligations.

While you cannot control the law and have no choice but to adapt to these changes, you can ask yourself certain questions that will help you to determine how to adjust. For starters, you should ask yourself the following questions:

1. Do you have employees classified as exempt that are earning less than $47,476 per year (or $913 per week)?
2. For these employees, does it make sense to increase their salary to maintain the exemption or convert the employee to non-exempt status and, among other requirements, pay by the hour and pay overtime? Please beware that if you increase exempt employees’ salary to satisfy the new exemption test, the penalties for misclassification will be greater by virtue of the increased salary.
3. Are you confident the employee is actually doing exempt work?
4. If you reclassify exempt employees as non-exempt, how are you going to explain this change to employees?
5. How are you going to ensure compliance with all of the time-keeping and wage calculation requirements of the FLSA for employees being switched from exempt to non-exempt?
6. If you have multiple employees working under the same job title, but some make more than $47,476 per year and some make less, what will you do?

If you find yourself struggling to determine answers to these questions, or what to do with the answers, you should take the steps necessary to obtain assistance in adjusting your practices before these changes go into effect on December 1, 2016. After all, when it comes to overtime lawsuits, the best defense to a claim is often to ensure compliance and avoid litigation altogether.

ABOUT RUSSELL BERGER

rberger@offitkurman.com | 410.209.6449

Russell Berger is an accomplished labor and employment attorney who is well-versed in litigating in both state and federal courts, as well as providing counsel to employers on employee matters. He represents employers, businesses and professional clients in employment disputes throughout the country. Mr. Berger primarily focuses on litigating and counseling clients regarding matters of minimum wage and overtime under the Fair Labor Standards Act and state laws, wrongful termination, non-compete agreements, and employment and severance agreements. Mr. Berger’s practice also includes handling claims and providing counsel regarding retaliation, discrimination and harassment (under Title VII and state anti-discrimination laws), as well as under other federal statutes, such as the Family Medical Leave Act (FMLA), the Age Discrimination in Employment Act (ADEA), and American with Disabilities Act (ADA). He also handles other work related issues such as employment contracts and general contract claims, employment-related tort claims, and other business and professional tort claims.

ABOUT OFFIT KURMAN

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