DOL Overtime Rule: What Next?

As you may be aware, the U.S. Department of Labor (DOL) has recently issued a final rule that significantly increases the salary threshold for exempt employees, a change that could have a substantial impact on your organization.

We have been receiving a lot of questions regarding this new DOL overtime rule, so we’ve brought in Colleen Pfaller, SPHR,SHRM – SCP, Principal, HR Consulting with OneDigital, to share her expertise.

It’s important to note that this change will come into effect on July 1, 2024. We recommend preparing now and adjusting your organization’s financial strategies accordingly. Some areas you may want to evaluate further include:

Salary Compression: One strategy is to increase the salaries of employees who might be close to the minimum threshold. Before doing so, there are factors to consider before increasing the salaries of junior team members, as this could make their salaries much closer to employees with longer tenure. It is a good idea to consider your compensation strategy as a whole when considering these changes.
Tracking Hours: Many organizations will find themselves having hourly employees for the first time. Consideration must given to the time and attendance tracking system that you will employ and how it integrates with your current HR and payroll systems. Policies and procedures related to time, travel, PTO, and holidays should be reviewed in support of these changes.
Planning: While the salary test defines the minimum threshold, the traditional duties test for overtime exempt employees will remain unchanged. Do all positions have job descriptions? Are they correctly classified as exempt or non-exempt?

This article from our team has more details and this calculator can help you assess the financial impact on your organization.

If you have further questions about this topic and are interested in connecting with our HR consulting team, please contact Amanda Shults, Principal, Ohio P&C Practice Leader with RiskSOURCE/OneDigital.

Our goal with the Risky Business series is to provide you with useful information to help you manage your risk and make better decisions.

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