May 2016
James B. Sherman, Esq.
James B. Sherman, Esq.
What do you get when the U.S.
Department of Labor abruptly more than doubles the minimum salary
employees must be paid in order to qualify as exempt from the overtime
requirements of the Fair Labor Standards Act (FLSA)? For starters, you impact many
millions of employees (an estimated 4-5 million). Employers are faced with the dilemma of choosing either to: (1) increase salaries of affected employees to the
new minimum - increases of up to 100% in some cases - in order to keep them
exempt from overtime; or (2) reclassify workers from exempt to non-exempt
status, thus making them eligible for overtime pay. So what’s the big deal? The
Obama administration claims the final
rule, which takes effect on December 1, 2016, will result in big pay hikes for millions of employees
whose salaries currently fall below the new $47,476 annualized minimum exempt salary
level. The administration’s theory
is that employees will receive a DOL imposed salary hike, or lots of
extra pay in the form of overtime pay at the FLSA required rate of 1½ times the
regular rate for all hours worked over 40 hours in a workweek. To be sure,
employers who fail to assess the impact of the sweeping changes under the DOL’s
new rule, will likely see huge spikes in payroll costs before the year is out;
that, or lawsuits from plaintiff wage and hour lawyers who are just licking their
chops at the many prospects for claims against unsuspecting employers. The potential
impact to the bottom line may be enough to put some employers out of business.
Particularly hard hit are retail, hospitality, healthcare and non-profit
organizations, although employers in manufacturing, transportation, food and
many other industries will no doubt be affected as well. Wessels Sherman aims to help employers deal
with these changes.
Wessels Sherman shareholders
James Sherman have been deeply involved in all the issues brought
about by the new DOL rule, really from the start. Their webinar last summer on
the proposed rule, drew a record-setting crowd.
The comments these attorneys assembled and submitted on behalf of
employers in opposition to troubling aspects of the proposed rule, were expressly
recognized out of the more than 270,000 comments the DOL received on its
proposed rule. Now, their webinar on June 2nd is among the first in
the country giving employers an early opportunity not only to learn the
pertinent details of the final overtime rule, but providing practical advice
from experienced wage and hour litigators on:
· Ways to assess the overall impact of these
changes on your organization.
· Determining what to do about the new rule (e.g. for
starters, whether to meet the new minimum salary or reclassify certain
employees from exempt to non-exempt).
· Implementing sound policies and practices (handbook
revisions, record-keeping, payroll practices, etc.) to address the sweeping
changes many employers are sure to face…very soon.
Already, our phones are ringing
and emails are buzzing with frantic HR and other business professionals seeking
guidance on these changes from our experienced practitioners. Mr. Sherman, along with other lawyers in our firm’s 5 offices around the Midwest,
are busy scheduling meetings and conference calls to assist employers with
coping with the changes brought about by the final DOL overtime rule. To
schedule your company’s initial assessment and develop a “plan of reaction” to
the new rule before it takes effect in just 6 months, contact us at our
Minnesota or Chicago offices, or any of our firm’s three other offices, below.
We also recommend attending our
early webinar on the subject to hear from our highly qualified, experienced
presenters. Another record crowd is already registering for this exciting,
information packed webinar, scheduled for Thursday, June 2nd, from
1:00 to 2:00 p.m. See below to register now!
