Plan Now to Avoid a Costly Overtime Lawsuit

On December 1 of this year, employers and employees across the United States will have to grapple with the harsh reality of yet another ill-conceived, overstepping federal regulation when the Department of Labor’s (DOL) costly new overtime rule comes into effect. The new rule, finalized by the Labor Department in May as an update to the Fair Labor Standards Act (FLSA), will more than double the pay threshold for salaried employees eligible for overtime compensation from $23,660 ($455 weekly) to $47,476 ($913 weekly) if those employees work more than 40 hours a week. Proponents of the change, including President Obama, boast that the new overtime rule will “make work pay” and “boost wages for working Americans by $12 billion over the next 10 years.” But for the nation’s job creators who must work within real-world budgetary constraints, we believe the true reality can best be summed up in the words of Tammy McCutchen, a labor attorney and former administrator of DOL’s wage and hour division: “Unless you have a secret pile of cash somewhere, you’re probably not going to be able to pay your employees more.”

Instead, as this post by the U.S. Chamber of Commerce points out, “employers will rationally respond by closely tracking the hours of newly overtime-eligible workers” and reclassifying millions of American workers from salary to hourly. The result will be a shock to the system for both employers and employees alike. In addition to the emotional and psychological impacts that will be felt by millions of Americans who could view their reclassification as a demotion, many employees will have to work much harder simply to keep track of the hours they work. No easy feat in today’s world of tablets, smartphones and around-the-clock access to office email accounts. Employers, however, will have no choice but to implement these changes. According to this Quartz report, federal wage and hours cases have doubled over the last decade, with overtime pay being a major focus in a majority of those cases. It should come as no surprise then that plaintiffs’ attorneys are expected to act quickly to take advantage of the new overtime rule to bring frivolous lawsuits against any businesses they feel are too slow to react.

So what can employers like you do to prepare for these coming changes?
Find out by joining us at our 2016 Human Resource Compliance Conference, taking place Wednesday, September 14 from 9 a.m. – 4:15 p.m. at the Sheraton Imperial Hotel & Convention Center in Durham. There you will hear from Kyle Still, labor and employment partner at Wyrick Robbins Yates & Ponton LLP, as he shares the latest updates on everything you will need to know to remain in full compliance with the FLSA and other employment-related regulations. Register now, before September 2, and you can take advantage of our special Labor Day pricing to receive a $50 discount off the regular ticket price. In addition to getting all the information you will need to come to grips with changing regulations, all attendees will receive 5.5 HRCI credits for taking part in this important discussion.

The NC Chamber will continue to update you on federal regulations that impact your organization’s growth potential. And with uncertainty prevailing at the federal level, we remain committed to the fight to keep our regulatory climate in balance at the state level so that you can continue to grow good jobs for the people of North Carolina.

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