DOL Overtime Changes: Is Your Business Ready?
The Department of Labor announced changes to the current overtime rules that could impact an estimated 3.6 million salaried workers. Here’s what you need to know.
DOL Announces New Overtime Rule
On April 23, 2024, the U.S. Department of Labor announced its new overtime rule, and increased salary levels for executive, administrative and professional workers (EAP) and highly compensated employees (HCE) to be exempt from overtime.
Effective July 1, 2024, to be considered exempt, an EAP employee’s salary needs to be the equivalent of $43,888/year ($844 per week). That threshold increases again January 1, 2025, to an annual salary of $58,656 ($1,128 per week). In addition, the rule will adjust the threshold for highly compensated employees (HCE), now requiring a minimum annual compensation of $132,964 to be considered exempt. The HCE threshold increases to $151,164 on January 1, 2025.
Starting July 1, 2027, salary thresholds will update every three years, by applying up-to-date wage data to determine new salary levels.
Are you prepared?
This new overtime rule means employers need to take a close look at their salary bandwidths and how much overtime employees are using. Does it make more sense to increase salaries or continue paying overtime?
Examine your current employees
Employers must review each exempt employee to verify that they will remain exempt under the new rules.
Track hours worked
After July 1, 2024, employers must carefully track hours worked for any employee making less than $43,888. After January 1, 2025, you’ll need to keep an eye on hours worked by those making less than $58,656.
Ensure accurate recordkeeping
Employers should maintain detailed records of hours worked in case of an audit.
How Paycor can help
Don’t wait to act. Now is the time to prepare for impending changes and Paycor has the products to help you stay ahead.
Paycor’s Department of Labor solution offers real-time compensation, timekeeping, and reporting through one unified solution. You can also use our HR Support Center tool to update your handbooks and company policies, or even get help from a certified HR professional.
Department of Labor Solution
Paycor’s Department of Labor solution offers you real-time compensation, timekeeping and reporting through one unified solution. You can also use our HR Support Center solution to update your handbooks and company policies, or even get help from a certified HR professional. With our Department of Labor Solution, you get:
Time & Attendance
Paycor’s time solutions help you accurately manage your employee’s hours through a unified system with payroll. Employers need a time solution put in place for their affected employees, so they have the accuracy, decision support, and audit trail required to effectively handle this proposed regulation.
Reporting
Employers will need to track and report data related to hours worked and compensation regularly. Paycor’s Reporting and Analytics help you get the data you need and allows you to report on compensation and hours worked data together. No need to download multiple files and copy and paste reports. Just a few clicks and you’ll have the data you need.
HR Support
Paycor’s HR Support Center will help you ensure your have up-to-date policies and employee documentation related to these updates. You can upgrade to On Demand and get help from a Certified HR Professional whenever you need it. It’s like hiring an HR team at a fraction of the cost.
This information is not intended as legal advice. You should seek specific legal advice before acting with regard to the subjects mentioned herein. Any calculations contained herein are for example purposes only.
Resources
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DOL Final Overtime Rules: Quickstart Guide for Employers
The DOL issued final overtime rules in April 2024. Use this guide to help your organization comply with regulations.
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