New overtime rules will impact retail, service industries

Q&A with Elizabeth Bowersox

published in The Oklahoman | December 22, 2015

The Department of Labor recently announced a final version of its proposed new overtime regulations would be released next year. These regulations, which could affect up to 4.6 million workers nationwide, would increase the minimum compensation for salaried employees who are classified as exempt under the Fair Labor Standard Act’s executive, administrative and professional exemptions. Currently, employers aren’t required to pay overtime to exempt workers who earn $23,660 or more annually and perform duties that are mostly managerial or technical in scope.

Labor and employment attorney Elizabeth Bowersox was interviewed by The Oklahoman about how these new regulations would affect employers’ payroll.

“Once the rule is enacted, employers who have salaried employees making under $50,440 annually and who’ve been treated as exempt under the old rules will either have to raise the affected employees’ pay in order for the employees to keep their exempt status, or reclassify employees as nonexempt and pay them for overtime work,” said Bowersox. “While some employers may be able to afford giving large pay raises to their affected employees to bring them up to the new minimum salary requirement, many will not. That’s why the months ahead, before the final rule is published, is a good time for employers to begin their audit and planning processes.”

Bowersox recommended that employers educate themselves on the FLSA exemptions, ensure all workers are properly classified, and begin working on an implementation plan if they have exempt employees affected by the new overtime rules.

“Some employers will be considering adjustments in staffing and work assignments designed to limit the possibility of incurring overtime,” she said. “Other employers will want to use this event to improve the accuracy of their timekeeping system and records.”