Today was supposed to be the day the Fair Labor Standards Act’s new overtime rule went into effect. But a judge’s injunction issued last week means no change for the tens of thousands of businesses and millions of employees that would have been affected.
To catch you up, the Fair Labor Standards Act (FLSA) overtime rule determines whether employees are eligible or exempt for overtime pay. Exempt employees, because of their rate of pay and type of work that they do, are not eligible for overtime pay for hours worked over 40 in a work week. Nonexempt employees, on the other hand, must be paid time and a half for any hours worked more than 40 in a work week.
The new rule would have raised the salary threshold for overtime eligibility substantially, from $455/week ($23,660 per year to $913/week ($47,476 per year). Also, the salary threshold was to automatically update every three years.
The changes now on hold are highly relevant to the 4.2 million American workers who would have been protected, but even before the injunction, there was a significant problem. Most employees didn’t even know the change was happening. According to a new YouGov survey of over 1,200 American workers commissioned by my partner Canvas, only 17 percent of workers said their employers have fully explained the new rules, whereas 54 percent said their employer hasn’t mentioned the subject at all.
Trucking/Warehousing, Consulting, and Machinery/Equipment round out the industries that are the most uninformed, with over 70 percent of respondents saying their employers had not provided information about the rule changes. These also happen to be industries with large numbers of nonexempt workers.
Considering how many employees would be directly impacted, either via higher paychecks or schedule changes, an unimpeded flow of communication is critical. Whether or not this rule is enacted, employers must devise an efficient system for alerting their workforces and explaining what the changes mean to every individual. However, it’s understandably difficult to rely on one-on-one conversations from the top down or manual processes that leave massive communication holes.
Updates to employment laws like FLSA represent just one area in which it makes sense to automate real-time distribution of information. There are a variety of systems and products that help organizations do this, but if you want to reach all your workers, it’s best to employ a mobile platform.
One such tool is the Canvas App, which not only allows companies to instantly share regulatory changes but also facilitates accurate timekeeping and record storage. All information can be imputed and reviewed on a smartphone or tablet, so employers and their workers can be 100 percent transparent about how much people are working and what they are being paid for that work.
It’s never easy to change a system that’s been in place for a long time – federal judge involvement notwithstanding. Unfortunately, there is always the potential for confusion and misunderstanding. Given that we don’t know exactly what’s going to happen with this new overtime rule over the coming months, you don’t want to be caught off guard. Automating as much as you can will take the pressure off and ensure that you’re doing right by your people and your business.