Governments: Prepare for the new overtime regulations that start Dec. 1!

In mid-May, the U.S. Department of Labor (DOL) announced revisions to the federal Fair Labor Standards Act (FLSA). The changes will greatly expand the pool of workers eligible for overtime pay. The DOL’s final rule updating the overtime regulations will automatically extend overtime pay protections to over 4 million workers during the first year of implementation.

The final rule expands the pool of eligible workers by more than doubling the salary threshold that determines coverage. Under the new rules, any salaried employee earning less than $47,476 annually would be entitled to time-and-a-half for work that exceeds 40 hours per week. Currently, the salary cutoff for overtime pay is $23,660. The final rule is scheduled to go into effect Dec. 1.

The final rule applies to workers in local and state governments as well as employees throughout the U.S. workforce. The publication, “Overtime Final Rule and State and Local Governments,” outlines some of the FLSA’s provisions and requirements. One provision that is applicable only to public sector workers is the permitted use of compensatory time off. Information in the report can help state and local governments comply with the DOL’s final rule on overtime.

GPN contacted Jamie Dokovna, an attorney with the West Palm Beach, Fla., office of Becker & Poliakoff to find out what local and state officials can do to ensure their departments comply with the final DOL rule.

GPN: What steps can local governments take to comply with the new U.S Dept. of Labor overtime rules?

Jamie Dokovna: Like employers in the private sector, local governments will now have to determine which employees are affected by the new overtime rule. Since the rule goes into effect December 1, 2016, it is important that steps be taken now to ensure compliance.  A good place to start is by reviewing the salaries of all employees and particularly those who are affected by the change because they make less than $913 per week ($47,476 per year) and are currently classified as exempt. Once those employees are identified, a decision will need to be made as to whether those employees should remain exempt. Local governments will need to think about the bottom line and whether it makes financial sense to re-classify those affected employees.

Where it makes sense to keep the employee exempt, the answer to the question, ‘What should we do?’ is simple — raise the employee’s salary above the new threshold. For all other employees, local governments will have to begin paying time-and-a-half for all hours worked over 40 in a workweek, limit the employees’ hours to 40 per week, offer comp time, or some combination of the three.

GPN: Will cities/counties need to track employees’ hours more closely and revise staffing protocols because of this revision in the DOL overtime regulations?

JD: Since local governments are already required to track and record work hours for non-exempt employees, the necessary means are there to track and record those hours of employees who will now be re-classified. The bigger hurdle will be enforcement. For employees who were not previously required to clock in or out, it might be difficult to transition. Early training will be necessary but enforcement will be critical to avoiding any potential wage claims.

Current policies and procedures concerning employee classification, tracking and recording hours, overtime, comp time, and enforcement will need to be reviewed and updated, if necessary. Further, any applicable policies and procedures must be communicated to those previously unaffected by the overtime regulations so that they understand and comply.

GPN: Should governments do some long-term planning based on this change in the DOL overtime regulations?

JD: Given that the salary threshold will update automatically every 3 years, starting January 1, 2020, it also makes good business sense to create a checklist of those actions being taken now so that future adjustments and compliance will be easier. With the new rule anticipated to affect over 4 million workers and more in the years to come, it makes sense to be prepared and proactive.

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