Change is coming for an estimated 330,000 Florida workers who earn between $23,660 and $47,476 a year.
New Department of Labor regulations announced last month double the pay threshold for overtime protection, effective Dec. 1. That means salaried workers, as in those who worked 40 hours or more a week and are not paid overtime, have to be paid at least $47,476 a year. The current floor is $23,660.
That sounds pretty straightforward, but the situation is a lot more complex than that, says attorney Christine Howard in the Tampa office of Fisher & Phillips, an employment law firm.
Some employees may have their hours cut. Others will have to start tracking their hours for the first time.
However, dishing out raises doesn't necessarily mean an employee is exempt from overtime. Some workers making more than, say $50,000 a year may still qualify for overtime.
Howard is urging employers to comb through these new regulations and communicate with their employees over the next six months. She broke down some of these changes in a recent interview with the Tampa Bay Times.
What can employees expect with the new rules?
Many employees who were once salary exempt and did not have to record their time are now going to find they are on-the-clock employees and fill out time sheets.
Employers will look at the salary these employees currently earn. They're going to have to come up with an hourly rate that fits in line with the salary they had and includes any overtime cost. For some people who are close to $40,000, many employers will increase their pay. This will help certain employees, and it will hurt other employees
Beyond the pay rate, can you explain the circumstances that qualify an employee for a salaried position?
First, there's the executive exemption (to being paid overtime) for employees in management positions. It's if they have direct supervision over two or more full-time employees and if their pay is lower than the minimum level ($47,476). If their primary duty is management they may be impacted. If their manager can't increase their salaries to this threshold they may be demoted.
Then, there is an administrative exemption. This is for employees performing office or non-manual work who have discretion and independent judgment on matters of significance. If you're a buyer and you're able to negotiate a pricing contract on your judgement, you may fall under this category.
A high-level executive assistant is another example. Not an assistant or secretary, but someone who is actually making important decision on who their manager or officer has visits with. Their function is critical to making key decisions on who gets a face-to-face meeting, for example.
What is your advice for business owners, executives and human resource managers as they adjust to this change?
Employers should take an opportunity to look at their job classifications and the exemption tests. These regulations don't take effect until December but it's a process.
Communication will be key to avoid lawsuits so they can appreciate why these changes are being made and so they can understand why they're being converted to hourly. I can't emphasize enough that companies need to look at this now in order to comply with the change by Dec. 1. Mis-classification is a very common lawsuit in Florida.
Contact Alli Knothe at email@example.com. Follow @KnotheA.