From the Desk of HR Solutions
OIA strives to keep our members informed on industry trends and forthcoming regulations that may affect your agency and staff. While our team is available to provide information to members, it is always recommended to work closely with an employment attorney when making decisions around exempt status for employees in order to comply with state law.
Potential Regulation Changes: Overtime Rules
We anticipate that the Department of Labor (DOL) will release new overtime rules in April of 2024. The biggest change is that the minimum salary threshold for white collar exemptions will increase from $35,568 ($684 per week) to $55,068 ($1,059 per week).
When the rule is released and covered in the media, you may receive questions from your employees. While it is highly likely that implementation of the new rule will be delayed due to litigation, we recommend making sure you understand how the new rule could impact your agency’s finances and your employees.
Media coverage may bring increased scrutiny to Fair Labor Standards Act (FLSA) job classifications. Additionally, non-compliance could result in significant fines and backpay of overtime wages.
Overtime Rules Over the Years
The last time the DOL released new overtime rules for employees was in 2016. At that time, the DOL under the Obama administration presented rules raising the minimum threshold from $23,600 to $47,476. That change was challenged in court and ultimately shelved when the Trump administration stopped pursuing the appeals process. Trump’s administration then released a new rule in 2019, raising the minimum threshold to the current $35,568 instead.
Did you know? Before the final implementation in 2019, the threshold had not been raised since 2004. Additionally, if the original threshold in 1975 had been adjusted for inflation every year since, it would be $56,500 today.
Steps to Prepare Your Agency
It’s been almost five years since the previous implementation of new overtime rules from the DOL. Here are five steps we recommend so that your agency can get ahead of potential HR issues:
- Review your current employees to determine if they will be impacted by the new threshold
- Re-evaluate your employees to determine if they are classified properly
- Determine the potential financial impact of meeting the threshold or changing exemption status
- Analyze company policies and consider the following:
- Will you need to change an employee’s status?
- Should you revisit expectations on tracking time and how many hours an employee can work?
- Is it necessary to revise policies on remote work or working after hours?
- Prepare a communication plan and implement changes, if necessary
Conclusion
In summary, you may not need to make immediate changes due to potential litigation. However, you should be prepared to answer questions from your employees and begin the planning process in case the new regulations can proceed.
For more detailed information on how to prepare, you can review the webinar on this topic directly in our Learning Portal, available exclusively to members. We encourage our members to visit the OIA Resource Center for additional HR Information and our updated guide for navigating exempt and non-exempt classifications.
If you have questions about this information or would like access to additional resources, feel free to reach out to Brian Lawrence, Director of HR Solutions, at brian@ohioinsuranceagents.com.
Legal Disclaimer
Seek your trusted advisors, Attorney, Banker, and CPA so that your legal and financial interests are adequately protected. The information provided in this publication is not intended to be a substitute for legal advice. It is always recommended to work closely with an employment attorney when making decisions around exempt status for employees and make sure you comply with state law. These laws and rules are subject to change. If you have more questions about this resource, you can contact Brian Lawrence, Director of HR Solutions, at brian@ohioinsuranceagents.com for the most up-to-date information.
Cited Sources
U.S. Department of Labor, Wage and Hour Division – Link
JDSupra – Link
Above The Law – Link
About the Author
Brian Lawrence is the Director of HR Solutions for Ohio Insurance Agents. He is responsible for providing HR support and resources for the membership. His HR career spans 25 years across Insurance, Financial Services, Healthcare, and Association Management.
Much of his experience includes 20 years at Nationwide, where he spent seven years as an HR Director/HR Business Partner providing strategic support to executive leadership teams across P&C, Commercial and Non-Standard Customer Service Operations, Life Insurance and Annuity Operations, & Nationwide Pet Insurance.
