New overtime proposal could present HR challenges

17 Jul

Companies may need to reclassify workers to avoid overtime.

The Department of Labor recently announced potential changes to laws governing overtime pay. Under the proposal, almost 5 million white collar workers would now have access to overtime pay. Currently, the threshold for salaried workers is set at $23,660, which is below the poverty line for many families. The new proposal would extend overtime pay to anyone making $50,440 per year. The old threshold was established years ago and hasn't been adjusted for inflation, leaving many middle class employees consistently working overtime hours without the benefit of overtime pay.

Challenges for human resources ahead
Naturally, if the rule goes through, companies may be forced to make strategic changes to prevent too many staff members from accruing costly overtime. According to Human Resources Executive Online, HR departments may need to perform compensation studies to take a hard look a specific positions and whether they would benefit from being reclassified from exempt employees to nonexempt and change their duties to reflect these adjustments.

In an interview with the website, Gregory Kamer, partner of management labor employment firm Kamer Zucker Abbott, said the rule will definitely create some changes in the employment landscape.

Companies that don't want to pay overtime will need to make some changes, he said. The choice will come down to employing more people or raising current staff members' wages to cross the threshold.

What counts as overtime?
Determining whether to reclassify employees and carrying out the necessary work to do so will be just one of HR's new challenges. Another issue will be curbing the hours of staff who remain under the threshold. In this area, email might prove to be a challenge, according to NPR. White collar workers find it harder to disconnect from work at night due to the availability of mobile devices. With just a few touches to a screen, employees can access their inboxes with no problem. The question is when employees check their email, does it count as work time? The answer is likely yes.

HR departments may soon field more queries about overtime pay and will have to double​ check compliance issues related to specific job duties and classifications. Ultimately, the ability to remain compliant could come down to having tools like employee management software that make it easy to monitor worker hours and salary requirements.

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