Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: May 26, 2016
The Firm
201-896-4100 info@sh-law.comNew Jersey employers should become aware of these new overtime regulations, promptly evaluate how the final rule will impact employee compensation and determine how to address the potential implementation costs.
Under the FLSA, “employees must receive overtime pay for hours worked in excess of 40 in a workweek at a rate not less than time and one-half their regular rates of pay, unless they are specifically exempted. The most notable FLSA overtime exemption covers “executive, administrative and professional” employees and is often referred to as the “white collar” exemption. To qualify, employees generally must satisfy certain tests regarding their job duties as well as meet a salary threshold set by the DOL.
As previously discussed on our Business Law blog, President Barack Obama signed a Presidential Memorandum in 2014, directing the Department of Labor to update the overtime regulations. In his directive, the President highlighted that the thresholds of the salary test have failed to keep pace with inflation, only being updated twice in the last 40 years.
Some changes made to the salary test rules were as follows:
Notably, the DOL did not make any changes to the requirements of the current “duties test,” which is used to determine whether salaried workers earning more than the threshold salary test are exempt from overtime rules.
It is recommended that a top-to-bottom wage review be conducted to determine what changes to current wage practices and structures may be necessary to accommodate these new requirements.
The DOL’s final rule will take effect on December 1, 2016, with the initial increases to the standard salary level and the HCE total annual compensation requirement starting on that date. According to the White House, the updated overtime rule will extend overtime protections to 4.2 million white-collar workers within the first year of its implementation. Accordingly, it will also have a tremendous impact on employers.
It is recommended that a top-to-bottom wage review be conducted to determine what changes to current wage practices and structures may be necessary to accommodate these new requirements. The fact that a worker goes from being classified “exempt” to “non-exempt” does not mean, necessarily, that such employee will receive more pay. What will change is the need to establish a “rate of pay” and overtime rate while also keeping careful and accurate track of all hours worked in a work week. Newly non-exempt employees must be paid overtime pay for all hours worked in excess of 40.
In some instances, an employer may choose to raise an exempt worker’s annual compensation to maintain such exemption if the cost of such raise is affordable.
There is no “right way” to make these adjustments. It is important, however, that employers engage in a thoughtful review of current pay practices to determine what adjustments, if any, will be necessary. Job descriptions are just one example of where review of terms and adjustment of rates should be considered.
The time to engage in this process is now as the implementation/compliance date is a little more than six months away. However, if you have any questions about this process or need to discuss any labor & employment matters, please contact me, Gary Young.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
If you’re considering closing your business, it’s crucial to understand that simply shutting your doors does not end your legal obligations. Unless you formally dissolve your business, it continues to exist in the eyes of the law—leaving you exposed to ongoing liabilities such as taxes, compliance violations, and potential lawsuits. Dissolving a business can seem […]
Author: Christopher D. Warren
Contrary to what many people think, corporate restructuring isn’t all doom and gloom. Revamping a company’s organizational structure, corporate hierarchy, or operations procedures can help keep your business competitive. This is particularly true during challenging times. Corporate restructuring plays a critical role in modern business strategy. It helps companies adapt quickly to market changes. Following […]
Author: Dan Brecher
Cryptocurrency intimidates most people. The reason is straightforward. People fear what they do not understand. When confusion sets in, the common reaction is either to ignore the subject entirely or to mistrust it. For years, that is exactly how most of the public and even many in law enforcement treated cryptocurrency. However, such apprehension changed […]
Author: Bryce S. Robins
Using chattel paper to obtain a security interest in personal property is a powerful tool. It can ensure lenders have a legal claim on collateral ranging from inventory to intellectual property. To reduce risk and protect your legal rights, businesses and lenders should understand the legal framework. This framework governs the creation, sale, and enforcement […]
Author: Dan Brecher
For years, digital assets operated in a legal gray area, a frontier where innovation outpaced the reach of regulators and law enforcement. In this early “Wild West” phase of finance, crypto startups thrived under minimal oversight. That era, however, is coming to an end. The importance of crypto compliance has become paramount as cryptocurrency has […]
Author: Bryce S. Robins
Earlier this month, the U.S. Supreme Court issued a decision in Ames v. Ohio Department of Youth Services vitiating the so-called “background circumstances” test required by half of federal circuit courts.1 The background circumstances test required majority group plaintiffs pleading discrimination under Title VII of the Civil Rights Act to meet a heightened pleading standard […]
Author: Matthew F. Mimnaugh
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!