Whether boon or curse, the U.S. Department of Labor’s overtime wage law will take effect Dec. 1 (see full story). Employment experts say now is the time to prepare for federal overtime regulations that could have significant effects on how businesses schedule, promote and hire for the foreseeable future.
Andrew Volin, an attorney with Sherman & Howard in Denver, said his firm is working with clients to prepare for the new overtime wage law.
Businesses have several options to mitigate the law’s overall impact, he said.
Increasing salary levels to maintain the exemption (and not worry about overtime);
Dividing current salary by 40 hours and switch to hourly (and worry about overtime);
Converting from salaried to hourly based on actual hours worked, so the net cost is the same (which requires reliable information about hours worked, and final pay will vary with hours worked);
Converting from salaried exempt to salaried non-exempt, and pay overtime for excess hours; or
Implementing a fluctuating work week that includes salary for all hours worked, including overtime.
‘Just another thing’
Benjamin Hase is an attorney with the Mountain States Employers Council, which provides employment law and human resources support. Hase said employers should take several steps to ensure compliance before the deadline.
“Employers need to audit all positions that could be affected,” Hase said. “If you have people exempt from overtime or minimum wage regulations and they are making less than the new limit, pull a list and audit those positions.”
Employers should be familiar with the Labor Department’s duties test and salary stipulations that differentiate exemptions, Hase said.
“Take a look at your organization’s payroll processing system and policy updates,” he added. “One anticipated difficulty with the new rule is those in management positions who just want to get the job done will want to work off the clock, but that’s a huge liability for employers.”
Aikta Marcoulier, executive director of the Small Business Development Center, said her organization has started to educate small business owners about the options regarding the wage law and will host an event Aug. 15 to address questions and concerns. Involved partners, Marcoulier said, include the Procurement Technical Assistance Center, the Better Business Bureau of Southern Colorado and the Colorado Springs Regional Business Alliance.
“We’ll be bringing down experts and attorneys, and the panel will talk about the wage changes and — if you’re doing government contracting — new paid time-off issues,” Marcoulier said.
She said many businesses were caught off guard when the Affordable Care Act was implemented, and this too could have a sizable impact.
“I think, all of a sudden, right before Dec. 1,” she said, “a lot of people are going to ask, ‘What do I do?’”
Marcoulier said industries across the board will be affected, but retail, hospitality, nonprofits, as well as seasonal workers in tourist destinations could feel a disproportionate impact.
“The best thing the SBDC can do is educate, and the businesses will have to make their own hard decisions,” she said. “And the best thing small businesses can do is communicate now, talk about the changes coming in December. … Communication has to be accurate so employees don’t sue. There’s already a lot of litigation where employees are suing their employers. This is just another thing. And if you’re not doing it right by Dec. 1, you could get into a lot of trouble.”