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Is Your Business Ready To Comply With Upcoming Changes To Wage Laws Under The FLSA?

On Behalf of | Sep 28, 2016 | Firm News

Starting December 1, 2016, employers may have to make big changes to how they pay their salaried employees under the Fair Labor Standards Act (FLSA). Once the changes take effect, employees making less than $47,476 per year may be eligible to receive overtime pay.

The impending changes mean many companies will have to make hard choices about how they compensate their workers to ensure compliance with federal wage laws and promote continued growth for their company. Furthermore, employers have other considerations like employee moral, staffing, and staying under budget.

How do I make sure I comply with new FLSA salary laws?

The new FLSA salary wage laws will affect an estimated 4 million workers across the country. About half of them will be restauranteurs and retail employees. Thin profit margins in these types of industries may present a daunting task but with some foresight and planning, most companies should be able to maintain compliance and growth.

For starters, companies should prepare by conducting a thorough audit of their payroll and employee salaries to see which salaried employees are on the bubble. Salaried workers at or near the new threshold can be compensated with bonuses or slight pay raises to accommodate the new federal wage laws.

Salaried employees closer to the current $23,660 threshold may present more of an issue. In cases where these employees work a relatively fixed number of hours during the week, their wages may be changed to an hourly rate that keeps them around their current rate of pay when overtime hours are factored in.

In either case, employers should go beyond a simple payroll audit and further explore whether or not salaried employees meet their job descriptions required by federal wage laws to be overtime exempt. Every year, thousands of overtime pay lawsuits are filed by employees alleging they were misclassified as managers or independent contractors and defending this type of litigation can be extremely costly.

Chicago employment attorneys for employers

If your company faces a lawsuit for alleged violations of state and federal employment laws, contact us online or call 312-332-6733 to speak to one of our experienced Chicago employment attorneys. The attorneys at Goldman & Ehrlich have years of experience representing clients on both sides of the law and will work tirelessly to ensure your legal rights are exercised.