Cities and counties need to prepare for new overtime rules

Public- and private sector workers will get additional overtime pay protections, thanks to revisions of the federal Fair Labor Standards Act (FLSA), announced in mid-May. The US Department of Labor (DOL) recently issued a final rule updating federal overtime regulations.

Diane O’Malley, a labor and employment attorney from Hanson Bridgett, offers her thoughts on the revised overtime rules below. The law firm is based in Northern California.

GPN: What steps can local governments take to comply with the new US DOL overtime rules?
 
Diane O’Malley: Local governments have until December 1, 2016 to comply with the new DOL exempt status salary threshold of $913.00 per week – nearly double the current $455.00 per week. Before December 1, these employers should review all current positions that are paid below this new minimum.

There are a number of options available to local governments that need to make changes – provide additional compensation; change the employee position to a non-exempt position and monitor the amount of overtime worked; use compensatory time off policy.

While this new rule may prove devastating to some small local government employers, it does give them an opportunity to review these positions and possibly uncover some heretofore missed problems – such as misclassified workers.

GPN: Will cities/counties need to track employees’ hours more closely and rely on worker time tracking systems?

DM: To the extent that employers choose to reclassify these positions as non-exempt, the employees should track their time to reflect hours worked so that the employer may pay overtime where appropriate. Local governments also have the option of providing employees with compensatory time off in lieu of cash payments for overtime worked.

Before implementing any compensatory time off policy employers should review manpower levels, the overall needs of the organization and absentee levels. Compensatory time off – while sounding harmless in theory – results in more time off for employees.  If employers are already stretched with employee absences, a compensatory time off policy exacerbates that problem. In addition, an employer may incur possible additional overtime costs for other employees who replace that employee taking compensatory time off.

GPN: Will the new DOL rule help encourage local governments to upgrade their time and attendance tracking and record-keeping systems for their employees?

DM: Some local government employers may still be on a handwritten time sheet method for non-exempt employees and perhaps have no system at all for exempt employees. The DOL final rule is an opportunity to upgrade that outdated system. Even before the new rule, employers had record keeping requirements that are often not met through lax time keeping procedures. Accurate timekeeping will be especially important now.

GPN: Do you have any advice for governments on how they need to respond?

DM: Right now, local governments should be reviewing job descriptions, budgets and operational needs given the possible financial impact of the new DOL regulation. Ask if part-time employees are an option?

Given the fluctuating nature of the new salary threshold amount, local governments should develop a policy that provides for ongoing auditing of positions on a regular basis to assure the incumbents are performing at the level required and that the salary still meets the minimum.

This recent GPN item has additional insight on the revised overtime rules.

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