FLSA Preparedness
By Kathryn O'Connor, PHR, SHRM-CP, CCP, GRP, Director, Compensation Services
Published May 7, 2024
As you’ve likely heard, the salary threshold used in the federal Fair Labor Standards Act’s executive, administrative, and professional exemption tests is set to increase twice over the next year. First, the salary threshold will increase to $844 per week on July 1, 2024. Then, on January 1, 2025, the salary threshold will increase to $1,128 per week.
As in 2016, the new rule will likely face numerous legal challenges. However, HR Source members should ensure they are prepared to comply with the new requirements. And we’re here to help.
Wondering where to start?
First, we suggest a review of your exempt jobs for compliance with the new criteria. Don’t forget to use our Field Guide to Employee Classification during your analysis. Map out your exempt positions, the annual pay of incumbent employees, and which exemption applies. You can also begin to identify individuals who may need a pay adjustment to meet the new salary threshold or face reclassification to non-exempt.
Meanwhile, inform senior leadership of these new rules and begin to draft a communication plan. When the time comes, you will need to act swiftly to execute your compliance plan and to communicate with affected employees. Be prepared to delicately handle reclassified employees to ensure they understand that becoming non-exempt is not negative or punitive, nor is it a reflection of their performance, potential, or status within the organization. Don’t forget that Illinois requires advance notice of pay changes. We’ve prepared a sample Sample FLSA Reclassification Letter for your use.
Finally, participate in education sessions and join the conversation. HR Source is rolling out a three-part series, designed to engage HR professionals at all levels. We hope to see you at one, two, or all three events!
Straight from the Source: Implementing the New FLSA Rules: May 14th
Join me and HR Source President & CEO, Mary Lynn Fayoumi, as we provide guidance on the specifics of the rule and have a candid discussion regarding the difficult decisions and tough conversations that will undoubtedly be part of ensuring compliance. Free for members!
FLSA Updates: Know the New Rule: June 5
This hot topic webinar will cover everything you need to know related to the updated FLSA rule including the new salary thresholds, employer actions required for compliance, and how to reclassify employees into a non-exempt status.
FLSA Workshop: June 11th
Need to sharpen the tools in your FLSA toolbox? In this workshop participants will take a hands-on approach. Joy Lynn Hyer will review the FLSA exemption tests applicable in Illinois and discuss how to conduct an FLSA analysis. Participants will then have time to work in small peer groups analyzing their own job descriptions.
If you have questions specific to your organization or need help in developing a plan to comply with the updated regulations, contact our Compensation Team at info@hrsource.org or (800)448-4584.