As always, at the end of each year it is important to take a look at what the upcoming year will hold with regards to changes to employment and labor law, particularly those that will directly affect your organization and your employees. In 2020, there are a number of state and federal changes that will be taking place that the many employers will be impacted by.
The biggest change that will hit employers in virtually any industry or location, and will apply regardless of the size of the organization, is the long-awaited update to the federal exempt salary threshold for exempt employees. After years of debate on the topic, the Department of Labor released their final ruling on September 24, 2019, announcing an increase to the salary-level thresholds for white-collar exemptions.
Here are some things you need to know about this change:
- Takes effect on January 1, 2020.
- The salary threshold for professional, administrative, and executive exempts will raise from $455 per week ($23,660 annually) to $684 per week ($35,568 annually).
- Also applies to those who fall under the “computer employee” exemption.
- The DOL has elected to permit employers to use incentive bonuses, commissions, and non-discretionary bonuses to satisfy up to 10% of the salary threshold for these exemptions.
- The threshold for highly compensated employees has been raised from $100,000 to $107,432 annually.
- The duties test has remained the same from the requirements in recent years.
Employers are strongly encouraged to review the FLSA classifications of their employees prior to the end of the year and should be prepared to make any necessary changes to job descriptions, exempt classifications, and salaries as needed to ensure compliance with the new ruling.
HRCentral will contact our affected clients and colleagues to assist with any changes necessary for a smooth transition, in addition to discussing changes related to any state-specific updates that will hit at the start of the new year (e.g., changes to family and medical leaves, independent contractor statuses, and minimum wage increases).
Contact HRCentral today if you have any questions regarding this new rule, or if you need any assistance updating your policies or procedures accordingly for compliance, by email at email@example.com or by phone at 800.574.3282.
Even though we have roughly two and a half months left of 2019, adequately preparing for changes that are bound to hit your organization in advance can save you a lot of hassle as the end of the year starts to creep up on us. As we all work on tying up lose ends and prepare to close the door on 2019, it is time to look ahead to a new year (a new decade!) and determine what we can do to ensure that 2020 begins in the most efficient and productive manner possible:
- Review Internal Policies and Procedures – Both HR and Management can participate in this annual review of what policies are outdated and need a refresh, and what procedures need some tweaking to match the culture and processes of the organization. Take stock of the last year and determine what worked and what didn’t, and plan to collaborate on how to effectively renew and implement these processes.
- Review HR-Related Documents and Systems – Predominantly the role of HR, similarly to how you would review internal policies and procedures, take a look at forms and documents and HR systems (e.g. leave administration and tracking, EEO tracking and reporting, vacation scheduling, etc.) and see what tweaks can be made to ensure everything is working as seamlessly and proficiently as possibly, both for the employee and for HR and management on the back end.
- Review Operational Functions – A task that generally requires the buy in from management and possibly from your employees (such as receiving feedback from a focus group), review operational functions and performance to determine what, if anything, needs to be modified to make certain your clients and customers receive the best service possible, and that everything runs smoothly behind the scenes.
- Prepare for Goal Setting – As we complete our goals from the past year, take a look ahead and honestly think about what you want to accomplish in 2020. With a fresh start and a chance to work with a clean slate, be proactive in your goal setting preparation and being brainstorming your personal and professional objectives and what you need to do to get there.
In addition to all of these preemptive approaches to the new year, there are a number of employment and labor law changes that will hit at the federal and state level. Follow along in our next post as we address some of these changes (including the long overdue update to the exempt salary threshold) and provide you with tips on a smooth transition and implementation process.
Contact us today for assistance in any of these categories. HRCentral specializes in helping organizations streamline and update processes, policies, and procedures to ensure maximum benefit to the employee and employer.
Are you ready for the December 1, 2016 deadline? After two years of debates and evaluations of comments, a final rule was implemented on May 18, 2016 the final rule was published (DOL Final Rule) with an effective date of December 1, 2016. The primary effect of this rule on employers is that exempt employee’s minimum standard has more than doubled. Exempt employee’s minimum salary will now be set at $ 913 per week ($47,476 annually). The minimum standard is also set to be adjusted every three years with the next adjustment beginning January 1, 2020.
In 2014 President Obama instructed the Department of Labor (DOL) to evaluate and propose a new rule that would address the deficiencies in the existing laws. These deficiencies were some industries paying managers and team leads the minimum salary of $ 455 per week ($ 23,660 annually and then those companies expected those employees to regularly work more than 40 hours a week. This of course led to some situations where managers were being paid less than the employees they supervised.
What does this mean for your business? First, you need to ensure that all of your exempt employees meet the new minimum standard. A simple report from payroll/HR can give you an idea if you already comply with the new regulation.
If you do have exempt employee’s that are below the minimum threshold, you will need to decide whether to increase their salary or move that employee to hourly. In the event, you need to move the employee to hourly, make sure that you meet with the affected employee and explain the reasoning behind the change. Additionally, you will also want to ensure that the employee understands the importance of keeping an accurate track of hours’ work.
Keep in mind that an adjustment to hourly may produce some hurt feelings and dissatisfaction. Often, employees see exempt status as a higher position than and hourly employee or if they are like me, just don’t like to fill out time cards.
While you are checking the salary requirements, HRCentral also recommends reevaluating your job descriptions for accuracy and ensuring that each position is truly exempt.
For more detailed information on how to prepare, On July 2, 2015 we published an article for preparing for the new exempt rules. Preparing for New Exempt Rules
It’s not too late to be prepared, HRCentral is here to help you and your HR Department be prepared. Contact us today.
Last Tuesday, June 30, 2015, the Department of Labor (DOL), acting upon President Obama’s directive, issued proposed rules for significant changes to the exempt classifications. These proposed changes are the first major modifications to the Fair Labor and Standards Act (FLSA) since 2004. You can find the proposed rules and more information on the DOL site here: Proposed FLSA Rule Changes (more…)
In the recent case of Perez vs. Mortgage Bankers Association (MBA), the Supreme Court issued their final ruling on March 9, 2015, stating that the Department of Labor (DOL) had the right to change its interpretation, with or without public comment or notice, of the law pertaining to the administrative exemption under the federal Fair Labor Standards Act (FLSA). (more…)