Fair Labor Standards Act and your Exempt Employees

Background

On July 1, 2015, the Department of Labor released proposed changes to the Fair Labor Standards Act (FLSA) — specifically regarding the “white collar” exemption from minimum wage and overtime pay. The public had until September 4, 2015 to comment on these proposed changes. Read the press release from the Department of Labor.

White Collar Exemption

Currently, FLSA provides an exemption from minimum wage and overtime requirements for any employee employed in a bona fide executive, administrative, or professional capacity. To qualify for exemption, employees must meet certain standards regarding their job duties and be paid on a salary basis at no less than $455 per week (the equivalent of $23,660 a year).

Proposed Changes

The proposed rule change would:

  • Raise the salary threshold from $455 a week to about $970 a week ($50,440 a year) when finalized in 2016.  This is the 40th percentile of weekly earnings for full-time salaried workers.
  • Increase the total annual compensation requirement needed to exempt highly compensated employees (HCEs) to the annualized value of the 90th percentile of weekly earnings of full-time salaried workers ($122,148 annually); and
  • Establish a mechanism for automatically updating salary and compensation levels in the future.

What Should I Do?

Track your exempt employee hours.  You need to determine if any of your employees are affected, and be prepared to ensure compliance.

When Should I Do It?

Begin immediately tracking the hours and devising a plan.  The proposed changes are anticipated to take effect in 2016.

While there is no guarantee the FLSA changes will take effect exactly as proposed, it is likely the changes to “White Collar” exempt status and overtime will change significantly.  Support Kansas City already implemented a system to track hours for employees affected by these proposed changes.  We recommend you learn as much as you can about the proposed FLSA changes and be ready to move when the dates are set.

 

Click here to view a brochure prepared by Paycor to help you master proposed Department of Labor overtime updates.


About the Author


Support KC


Generic filters

For the benefit of the nonprofit sector everywhere, we wanted to provide resources for ways we can continue to operate and grow within this era. And once social distancing begins to fade, what lessons can we take from this to improve our operations permanently. Come back often for more updates.

Accounting & Fiscal Management

  • Structure general ledger, chart of accounts, setup assistance
  • Monthly accounting support: accounts payable, accounts receivable, deposits and receipts, bank reconciliation
  • Payroll preparation
  • Preparation of management reports
  • Financial report preparation for board meetings
  • Grant tracking and reporting
  • Preparation of IRS Form 990
  • Preparation of annual 1099’s
  • Preparation of schedules for independent audit, assistance with audit completion
  • Cleanup of past accounting records
  • Budget preparation assistance, reporting and analysis
  • QuickBooks training

Governance & Strategy Development

  • Governance training
  • Executive mentoring and coaching
  • Board retreat facilitation
  • Strategic planning documents
  • Outcomes and impact measurement and reporting
  • Survey assistance

Database Management

  • Database design and development
  • Gift and demographic data entry
  • Donor acknowledgement letters
  • Import and export of data; mail merges; exports to mail house
  • Data and donor analysis
  • Integration with accounting systems, fund development and social media activities
  • Database training
  • Ongoing support and technical assistance

Fund Development

  • Create annual fund development plan
  • Fund development plan audits
  • Board Training
  • Capital campaigns
  • Grant management: research, writing and reporting
  • Major gifts and planned giving
  • Special event planning and support
  • Annual fund drives
  • Annual appeal mailings