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Changes to Fair Labor Standards Act to Take Effect December 1st

What is Changing?

On May 18, 2016 the Department of Labor published its final ruling on the overtime exemption regulations of the Fair Labor Standards Act. These significant changes will overhaul the payment structures of millions of companies, whether they are small businesses, huge corporations, higher education or nonprofit organizations. Starting December 1, 2016, the rule change will make approximately 4.2 million previously exempt employees across the country eligible for overtime pay.

Here is what’s changed: Under the old overtime rule, workers earning up to $23,660 ($455 per week) were eligible for overtime pay, but under the new rule, almost any employee earning less than $47,476 ($913 per week) must be paid time and a half for any work over 40 hours. The changes don’t stop there, because every three years, the salary threshold will be updated to adjust for inflation. On January 1, 2020, the threshold is forecast to rise to $51,000 ($980 per week).

overtime-state-map

How will this affect your business? Well, it’s estimated that employers across the U.S. will spend over $500 million to comply with the new rule. The Department of Labor guesses that each of the 7.4 million affected establishments should need one hour to adjust to the changes, but The Society for Human Resource Management believes much more time will be necessary. This all begs the question: Are you properly prepared to fully comply with these changes?

What the Trump Presidency Could Mean for Overtime

The rule change goes into effect on December 1st, 2016. But after President-Elect Trump assumes the office on January 20th, he may fight for a small-business exemption and to revoke the automatic triennial inflation adjustments. However, reversing these changes would take many months, possibly years. In the meantime, companies will still need to comply with the current policy.

Trump isn’t the only person who may attempt to reverse, alter, or postpone the overtime rule. The U.S. District Court for the District of Eastern Texas is expected to issue a decision on whether or not to delay the rule in the next few days, but businesses are advised to be ready to fully comply.

What Should You Do?

Business is not going to stop just because the overtime rules are changing. If you need to hire temporary or contract workers, it is important to ensure they are properly provided for underneath these new regulations. How can you make sure of this? Partner with a staffing firm that is on top of all the changes in workplaces rules and regulations. Tri-Starr guarantees total understanding of and complete compliance with the changes to the Fair Labor Standards Act, ensuring that your business remains safely within the boundaries of employment law.

If you have any questions about how these changes will affect your business in regards to temporary or contract staffing, do not hesitate to reach out. Tri-Starr is here for you.


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