Update on Overtime Rules - December 14, 2016
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Transcript of Update on Overtime Rules - December 14, 2016
![Page 1: Update on Overtime Rules - December 14, 2016](https://reader036.fdocuments.in/reader036/viewer/2022062503/58788c251a28ab375f8b4e87/html5/thumbnails/1.jpg)
Better Workplace
Better Workforce Better World
Update on Employee Overtime Rules
December 14, 2016
![Page 2: Update on Overtime Rules - December 14, 2016](https://reader036.fdocuments.in/reader036/viewer/2022062503/58788c251a28ab375f8b4e87/html5/thumbnails/2.jpg)
KPA: Environmental Health & Safety | HR Management |Sales & Finance Compliance
KPA delivers Environmental Health & Safety, HR Management and Sales & Finance
Compliance programs with a vision of creating a Better Workplace, Better Workforce,
and a Better World. Over 6,500 clients, across 48 states look to KPA as their
compliance partner providing solutions through a combination of innovative software,
interactive training and on-site consulting, resulting in increased production and profits.
A comprehensive solution for Environmental Health & Safety, HR Management,
and Sales & Finance Compliance.
![Page 3: Update on Overtime Rules - December 14, 2016](https://reader036.fdocuments.in/reader036/viewer/2022062503/58788c251a28ab375f8b4e87/html5/thumbnails/3.jpg)
Questions
• If you have questions during the presentation, please submit them using the “Questions” feature
• Questions will be answered at the end of the webinar
•If your question does not get answered, we will reach out to you individually
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What happened?
• An injunction was issued that delay the implementation date,
which was to be December 1st
• The DOL filed an expedited motion of appeal on December
1st
• The rule might still be enforced and retroactively to
December 1st
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What do we do?
• Employers don’t have to revert back to old
rule
• But if they do state notice requirements will
apply
• Inconsistent pay adjustments will cause
issues
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What was that rule again?
• Exemption from Overtime = $47,476 ($913 per week)
More than $455 but less than $913 will need to be reclassified
• No changes to duties test
• 3 year increases
• Ability to count bonuses, commissions and incentive
payments
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Federal Exemptions
MINIMUM WAGE/ OVERTIME/ RECORDS
• Executive
• Administrative
• Professional
• Highly Compensated
OVERTIME ONLY
• Salesman
• Partsman
• Mechanic
• Commission-paid
• Motor Carrier
The FLSA also has an exemption from the overtime pay requirements for certain
commission employees of a retail or service establishment. For this exemption to
apply, three requirements must be met: (1) The employee must be employed by a
retail or service establishment; (2) The employee’s regular rate of pay must exceed
one and one half times the applicable minimum wage; and (3) more than half of the
employee’s total earnings in a representative period must consist of commissions on
goods and services.
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Three Factors
• How is the employee paid?
• How much is the employee paid?
• What does the employee do?
The employee must be paid a salary, must make a minimum of
$913 per week/ and must meet all of the qualification of one of
the duties test to be classified as exempt.
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The Duties Test
1. Executive
2. Administrative
3. Professional
4. Computer (rarely used in dealerships)
5. Highly Compensated Employees“highly compensated employee” exemption under 29 U.S.C. §
541.601. The relevant section of the regulation reads: “An employee with total annual compensation of at least $100,000 is deemed exempt . . . if the employee customarily and regularly performs any one or more of the exempt duties or responsibilities of an executive, administrative, or professional
employee.”
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Federal versus State Law
• Federal law does not preempt state
employment laws
• Employees are entitled to the provision
most favorable to them
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Payroll Practices: Red Flags
Watch out for “red flags” regarding payroll practices:
– Improper deductions from salaried employees
– Improper calculation of “regular rate”
– Job descriptions for exempt employees that do not reflect exempt duties
– Nonexempt employees working through meal breaks
– Nonexempt employees performing work before or after they punch or log in/out
– Employees who routinely stay late but have no overtime
– Not complying with employer’s own written policies
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“Are they exempt from overtime?”
• What does the employee spend the
majority of his time doing?
• How is employee’s pay plan structured?
• Does employee fit exactly into one of
the nine exemptions?
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Common Classification Mistakes
• Not considering differences in state and federal salary and duties tests
• Treating trainees as exempt before they fully qualify as exempt
• Failing to guarantee the proper minimum salary
• Prorating the salary of a part-time exempt employee to less than $913/week
• Making improper deductions from salaries of exempt employees
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Questions and Answers
14– KPA CONFIDENTIAL –
QUESTIONS?
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Contact Information
15
www.kpaonline.com
866-356-1735