Executive Summary
Overview: As we previously announced, the Department of Labor (DOL) has published final Fair Labor Standards Act (FLSA) regulations that are effective December 1, 2016. As a service to our clients, we have created a toolkit to help you prepare for the effective date of the regulations. For a new Employer Toolkit, contact your HRBP.
The Regulations
Briefly stated, the final regulations make the following changes:
- The new regulations impact employees exempt under the administrative, executive, professional (excluding doctors, lawyers and teachers) and computer related professional (if the employer is choosing to pay on a salary basis) exemptions.
- The new standard salary threshold for the impacted exemptions above is $47,476/year ($913/week).
- Similarly, there has been an increase in the highly compensated employee (HCE) exemption. The final rule increases the annual compensation level to $134,004/year.
- The DOL also established automatic increases every three years to the two salary thresholds, beginning January 1, 2020.
- Employers are allowed to use nondiscretionary bonuses and incentive payments to satisfy up to 10% of the salary in the standard salary test. That is $91.30 per week or $4,747.60/year.
The DOL has issued Fact Sheets and FAQs on the final regulations which can be accessed by clicking here.
The Toolkit
The Employer Toolkit provides tools and resources designed to help you comply with the FLSA and the new regulations including:
- An overview of our people and technology solutions
· A readiness checklist
· Instructions on how to generate reports that may help you identify impacted employees
· Best practices for reclassifying employees and
· Sample employee communications
As always, please contact your Human Resources Business partner for a new toolkit or if you have any questions.
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This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice.
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