The Department of Labor (DOL) released a proposed rule in July 2015 that, if enacted, could impact up to 4.6 million workers, potentially entitling them to receive overtime pay. Those who could qualify include exempt, salaried employees who make less than $50,440 per year (or $970/week). The current threshold is less than half of this amount ($23,600 per year or $455/week).


This proposed rule would significantly change the existing regulations governing which “white collar” workers are entitled to the Fair Labor Standards Act’s (FLSA) minimum wage and overtime pay protections. The rule would increase the salary level threshold that is required to classify an employee as exempt from the FLSA’s minimum wage and overtime pay requirements. While the rule does not have an official effective date, the recently released Fall 2015 Agency Rule List for the DOL, by the Office of Management & Budget, has the final rule timetable slated for July 2016.


The DOL’s updated overtime rule creates an additional workload for employers in order to become compliant, which could include reclassifying employees, hour logging, adjusting wages, updating tracking systems, and more. Paylocity’s human capital management and payroll solutions can assist with some of the work.


Accuracy and accountability in time and labor management will be a key factor in ensuring compliance under the new legislation. Additionally, accurately tracking hours will help employers manage costs and productivity. Paylocity Web Time can help with tools like time and attendance tracking, scheduling, and reporting and dashboards. Features like geo-fencing and mobile attendance tracking put the power of time and labor tracking in the hands of employers and their employees.


Paylocity Web Pay can also help employers pull lists of employee information, including whether they are exempt/nonexempt and their compensation. Understanding which employees are impacted by the new legislation will be the first step for employers before creating a plan to become compliant.


Click here to read more about the new proposed law and how to prepare for its enactment. If you have any questions, please contact us.