Review the new overtime rule before hiring for the holidays
- Companies should get ready for the hiring season this holiday by making sure they comply with the new overtime law, warns SHRM. The Department of Labor’s rule becomes effective on Dec. 1. The law classifies more workers as nonexempt, making them eligible for overtime pay. Nonexemptions are up from a base annual wage of $23,660 to $47,476
- The new overtime law largely affects white-collar workers categorized as executives, administrators and professionals who didn’t qualify for overtime. Most seasonal workers are nonexempt and won’t be directly affected by the change. Speculation is that companies might try to skirt the law by having permanent staff manage seasonal workers instead of hiring seasonal managers they would have to spend time and money to train, notes SHRM.
- Another way employers are getting around the law, and by default, avoiding paying overtime, is by raising nonexempt workers’ wages to meet the exempt salary threshold.
Employers might raise nonexempt workers’ pay to the exempt-level threshold to keep valued workers onboard and to minimize turnover. In that case, employers should review exemptions the new rule doesn’t cover to stay compliant with the law.
Employers hiring for the holidays also should review exemption rules to make sure classifications for seasonal positions they typically fill haven’t changed under the new law.