Navigating the Fair Labor Standards Overtime Rule

An Update for Staffing Firms

It would be tough to miss the news about the new federal regulations for overtime pay. This ruling goes into effect this December, so there is little time to determine how it affects your firm and what actions you should take. Smart staffing professionals will educate themselves on the ruling and develop a strategy to capitalize on it.

What is the ruling?

Effective December 1, 2016, workers who earn $47,476 a year ($913 a week) or less will have to be paid overtime, even if they’re classified as a manager or professional. This threshold will rise every three years; the next update is expected to occur January 1, 2020, raising the salary level to $51,000.

How can employers handle it?

Raise employees’ salaries and retain the overtime exemption. By bringing your employees to the $47,476 level, everything else remains the same. Just keep in mind that you will need to continue raising the salary to keep up with the threshold dictated by the regulation, but it may be more cost-effective than paying overtime to employees who are currently close to the threshold and typically put in more than 40 hours per week.

Pay the overtime. If employees are only occasionally called upon to work overtime, it may make more sense to simply pay it when it comes up, particularly for those employees whose current salary is substantially below the $47,476 level.

Shift the workload. Wise employers will take advantage of this ruling to reevaluate the work being performed. Could some tasks be handled by lower paid employees? Does it make more sense to hire additional people than increase your overtime expenses? Can temporary employees fill the gaps at a lower cost?

This last option is where staffing and recruiting firms can shine. Discuss with your current clients how you can help them meet the requirements of the ruling by developing workforce solutions that can enable them to operate more efficiently and cost-effectively. Reach out to potential new customers who may have no idea of the many options working with a staffing firm can bring.

About Avionté:

At Avionté, we provide solutions for staffing firms that help you to operate more effectively and keep your operational costs down. Our comprehensive staffing software delivers integrated software systems that make it easier to drive growth, maximize profitability and streamline your administrative tasks, so that you can focus on your serving your customers. To learn more about the many benefits of Avionté staffing software, contact us today.