Department of Labor Changes to Overtime
Most human resources administrators are aware of the recent changes that were made and announced by President Obama and Secretary of Labor Thomas Perez in May, 2016 regarding the rules for determining who must get paid overtime. The new "final rule" for overtime raises the wage threshold for those who qualify for overtime so that, in general, salaried employees making less than $47,476 annually

The new overtime criteria goes into effect on December 1, 2016. That means employers have only a few more months to prepare for the new overtime criteria to be enforced.

Tracking Overtime and Labor Costs
The most significant change for businesses that is made necessary by the new overtime rule is the requirement to expand the number of employees for which overtime must be tracked. Companies that currently only employ salaried workers who will be affected by the new federal "protection" must find and implement a time tracking system that will allow them to determine how much overtime is owed to their salaried employees. Many companies already tracking time for overtime-eligible employees will need to add more workers to their existing system.  Either way, the matter of tracking the time employees spend working during the week is now a bit more complicated and more expensive.

Because of how much this new rule affects wage expenses and the bottom line for so many companies, the issue of labor costs becomes a topic of discussion. The simplest way to deal with the new federal overtime criteria is to adjust manpower to avoid being subject to the updated laws. It may be that a simple change in a few schedules will make it so that additional expenses from timekeeping systems and new overtime wage demands itself may not apply. Most larger businesses, however, will have to be more sophisticated in order to be compliant with the rule. These businesses often rely on the expertise of their payroll or PEO partners, who use workforce management technology (including automated labor cost management software) to ensure that labor costs don't overly burden the company and kill profitability.

Begin Now If You Haven't
One mistake that should be avoided is underestimated how much time and effort it may take to make an organization capable of complying with the new federal overtime rules. Companies whose workforce may be affected by the new law should have the discussion now, bringing in consulting (internal or from payroll and PEO partners) help from those who might best know whether they will be affected and how to respond.