Barring something completely unexpected, the new overtime rules—effectively setting a federal minimum wage of $913 per week ($47,476 per year) for most exempt executive, administrative, or professional employees—will take effect on Thursday, December 1.

That Congressional bill to delay the effective date of the new rules by six months?  The President promises to veto it if it makes it to his desk.  The lawsuits filed by the coalition of States and by the Chamber of Commerce and industry groups to enjoin the new rules?  We expect motion practice in the next few weeks.

So assume it’s happening.  What is your plan?

  • Will you raise salaries of exempt workers to the new minimums?  If so, do you still have any “duties test” risks?
  • Will you take advantage of your right under the new rule to use bonuses, commissions, or other incentive compensation as a credit toward the new salary threshold?
  • Does your workweek coincide with the effective date of the new rule (a Thursday), or does it begin, for example, on the Sunday or Monday before the change?  If so, are you prepared to pay your exempt employees at least $913 for the week in which December 1 falls?
  • Will you reclassify some employees to overtime-eligible?  If so, are your communication plans in place?  Are your colleagues in Human Resources, payroll, benefits, and elsewhere prepared for the change in classification?
  • If you are reclassifying, are you ready to manage the potential overtime costs?  Do your supervisors understand what kinds of hours are considered “hours worked” (e.g., certain travel time, time spent working from home or remotely, time spent using technology for business purposes, etc.)?
  • When will you start counting “hours worked” if December 1 falls in the middle of your workweek?
  • Have you considered the alternatives to paying reclassified employees on an hourly basis?
  • Do you understand what kinds of compensation will have to be included in the “regular rate of pay” for overtime purposes?

The USDOL and the plaintiffs’ bar are ready for December 1.  Are you?

Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Allan Bloom Allan Bloom

Allan S. Bloom is a nationally recognized trial lawyer and advisor who represents management in a broad range of employment and labor law matters. As a litigator, Allan has successfully defended a number of the world’s leading companies against claims for unpaid wages…

Allan S. Bloom is a nationally recognized trial lawyer and advisor who represents management in a broad range of employment and labor law matters. As a litigator, Allan has successfully defended a number of the world’s leading companies against claims for unpaid wages, employment discrimination, breach of contract and wrongful discharge, both at the trial and appellate court levels as well as in arbitration. He has secured complete defense verdicts for clients in front of juries, as well as injunctions to protect clients’ confidential information and assets.

As the leader of Proskauer’s Wage and Hour Practice Group, Allan has been a strategic partner to a number of Fortune 500 companies to help them avoid, minimize and manage exposure to wage and hour-related risk. Allan’s views on wage and hour issues have been featured in The New York TimesReutersBloomberg and Fortune, among other leading publications. His class-action defense work for clients has saved hundreds of millions of dollars in potential damages.

Allan is regularly called on to advise boards of directors and senior leadership on highly sensitive matters such as executive transitions, internal investigations and strategic workforce planning. He also has particular expertise in the financial services industry, where he has litigated and arbitrated cases, including at FINRA and its predecessors, for more than 20 years.
A prolific author and speaker, Allan was the Editor of the New York State Bar Association’s Labor and Employment Law Journal from 2012 to 2017. He has served as an author, editor and contributor to a number of leading treatises in the field of employment law, including ADR in Employment Law (ABA/Bloomberg BNA, Senior Editor), Employment Discrimination Law (ABA/Bloomberg BNA, Final Proof Editor), Cutting Edge Advances in Resolving Workplace Disputes (Cornell University/CPR, Editor), The Employment Law Review (Law Business Research, U.S. Chapter Author), and The Complete Compliance and Ethics Manual (SCCE, Chapter Author).

Allan is a member of the NYSBA’s House of Delegates, sits on the Executive Committee of the NYSBA’s Labor and Employment Law Section, and is a Fellow of the College of Labor and Employment Lawyers. He has been recognized as a leading practitioner by Chambers since 2011.

Photo of Rachel Philion Rachel Philion

Rachel S. Philion is a partner in the Labor & Employment Law Department, co-head of the Wage and Hour Practice Group and a member of the Employment Litigation & Arbitration and Class and Collective Actions Practice Groups.

Rachel represents management across all industries…

Rachel S. Philion is a partner in the Labor & Employment Law Department, co-head of the Wage and Hour Practice Group and a member of the Employment Litigation & Arbitration and Class and Collective Actions Practice Groups.

Rachel represents management across all industries in a broad array of employment matters, including wage-and-hour, discrimination, harassment, retaliation, as well as whistleblowing, wrongful discharge and breach of contract disputes.  In addition to jury trial experience, she has extensive experience litigating nationwide class and collective actions.

In addition to Rachel’s active employment litigation practice, she regularly advises clients on litigation avoidance strategies and compliance issues, conducts wage and hour audits and leads workplace investigations.

Rachel was selected as a “Rising Star” by The Legal 500 for 2019 and New York Super Lawyers for 2017-2019.  She is a current member of the Committee on Labor and Employment Law of the New York City Bar Association, and a past member of the Executive Committee of the Labor and Employment Law Section of the New York State Bar Association and former co-chair of the Section’s New Lawyers’ Committee.