Going into Overtime: DOL's Final Overtime Rule

Football here and that means we're going to be seeing a lot more nail-biting football fans watching their teams duke it out into Sunday afternoon overtime.  But on December 1, 2016 employers will now have their own overtime issues to be nervous about.  The DOL has made some major adjustments to their overtime rules and the resulting changes will have a huge impact on workers (an estimated 4+ Million of them) and their employers.  One of the biggest changes is that the DOL increased the salary basis test for non-exempt employees from $23,660 to $47,476 (or $913/week).  This means that if you have employees making less than that $47,476 amount on December 1, 2016 you'll probably need to start paying them for any hours worked in excess of 40 per week.

What this really means is that on December 1, 2016 there are going to be a lot of employers out of compliance and a lot more employees who will be eligible for overtime.  We've seen a ton of small businesses who have a hard time complying with the FLSA to begin with, so we're not sure what's going to happen with this new rule.  The result of this change may not be seen immediately.  My guess is that new wage and hour claims (which happen to be some of the most common employment claims that employees make) will start to trickle in once employees realize how much money they're losing out on.

Here are the big takeaways to note:

• Increase from $23,660 to $47,476 ($913/week)
• Increase highly compensated employee compensation threshhold from $100k to $134,500. 
• Continuous update to salary threshhold every 3 years with step increases.  
• Effective date of December 1, 2016

So what should employers do?   We're recommending that employers take the following steps prior to December 1, 2016:

1. Pull a list of employees who make less than $47,476.00 (or $51k if you don't want to do this again in three years).
2. Communicate to these employees that their positions will be reclassified as non-exempt on December 1, 2016;
3. Explain to them what non-exempt means and why the change is occuring;
4. Consider implementing policies that address when employees should work as well as how schedules and hours are approved;
5. Consider reviewing  and updating any documentation that describes exempt/non-exempt employment (Job Descriptions, Handbooks, etc.).
6. Consider implementing some sort of time tracking software like TSheets or Harvest
7. Determine financial implications and address by capping hours, reducing hours, adjusting salaries, or budgeting in overtime.

As with most HR issues if you operate in California you're playing by a different set of rules, which we'll try to cover in a later blog post.  And if you have any questions, feel free to reach out to us at info@suitless.com

The International Entrepreneur Rule in Plain English

We've gotten a ton of questions surrounding USICS and DHS's proposed International Entrepreneur Rule, so we've taken a crack at explaining the proposed rule in plain English.

The International Entrepreneur Rule grants parole to non-US entrepreneurs in order for them to work for their U.S.-based startups for an initial period of two years.  Entrepreneurs can then add one additional period of re-parole for three years, totaling five years.  This totals five years for a maximum of three entrepreneurs at a startup.

Entrepreneurs will have to argue and prove three criteria:

1. That their Company is a start-up;
2. That they are an Entrepreneur;
3. That they've gotten substantial capital from qualified investors.  

If you think that you can meet all three criteria, you'll need to fill out an application form and pay a $1,200 filing fee and an $85 biometric fee.  You'll then submit evidence and can expect 5 months (150 days) for USICS to decide.  You'll then wait 3 months (90 days) to schedule an appointment to submit biometric information (fingerprints and photos).  You'll also have to pay yourself a salary of at least $47,520 once USICS grants parole.

If you believe that you meet the criteria and think you're a good candidate for the PE-1, head over to www.visapreneur.com/PE-1 to check out a beta version of a tool that will help you assemble all of the documents for the application.