VANNOY:
Prepare for changes to exempt employee rules. This is a really, really big important topic. There’s a change coming to a minimum salary requirement for exempt employees that I’d say is really long overdue. We don’t know exactly what’s going to come, but we think it’s really soon. We have indications from Department of Labor that’s going to happen, and the impact could potentially be really, really big for some employers. So I got the perfect guest to unpack this with me. If you guys watch the show regularly. Mary Simmons Mary is our vice President of HR compliance at Ashore. She holds a S h RMM certified professional certificate also, she was, for the last eight years, Mary has been an adjunct professor at the New York Institute of Technology. Prior to Assurer, Mary was the director of HR consulting for a 58 year old HR consulting firm in New York. Welcome back to the show, Mary.
SIMMONS:
Thanks, Mike.
VANNOY:
Okay, so the meat that I really want to spend most of our conversation on is the Department of Labor. We have indication that they’ve said end of summer, well, we’re kind of there right End of summer, there’s going to be a change to the minimum salary requirement for exempt employees. I think we’ve done the show before. You can watch on demand hop on the YouTube channel on our website and learn about the difference between exempt and non-exempt and how to classify employees. I don’t want to go too deep on that, but maybe let’s just start with a quick definition for somebody who is just watching this show for the first time and they don’t necessarily know the difference, can you just kind of give us a primer on exempt versus non-exempt F L S A, et cetera?
SIMMONS:
Yeah, and I’m sure it needs some repeating because it does confuse a lot of employers. So first of all, every employee must be classified either exempt or not non-exempt, no exceptions. And this is part of the fair labor standard tax. So that’s a federal law, and I think what confuses people, Mike, is that everybody knows wage. So everybody is in tune to the fact that there’s a federal minimum wage, and then many states will have their own minimum wage. Employees always get the better of a law. So federal minimum wage for a non-exempt employee who is paid hourly is 7 25, but many states New York is $15, so quite a bit more than twice the amount. So everybody understands that
VANNOY:
Last count. That’s like 155 state and local jurisdictions for a minimum wage, right? 33 of the 50 states have their own. 26 of those 33 have been updated already this year, but a real explosion at the local level, county, city, local municipality.
SIMMONS:
So we know that that is causing some compression and so does the federal government. So for your exempt employees, they do not get overtime over 40 hours. Your non-exempt employees are not exempt from overtime. That’s where the term comes. Your exempt employees are exempt from overtime. They can work 60 hours in a week and they don’t get overtime. But what a lot of employers don’t realize is that your exempt employees also have a minimum wage that you have to pay them a salary on a weekly basis that you have to pay them for them to be exempt. You can’t pay them $20,000 a year, Mike and call them exempt and they don’t get overtime. That is what is going to be increased by the federal government. The minimum wage for exempt employees,
VANNOY:
And I think this is an area Mary, that many people, this may be the first time they’ve ever even heard that term, they think minimum wage, that’s hourly. I would encourage folks to watch our other show either on the website or YouTube channel on exempt classification. There are specific rules based on the job description. There are certain very specific exemptions that you can use, but it’s not, Hey, this person is a regular, I always want to give them a regular paycheck. They work 30 hours a week, I’m going to give them a $20,000 salary so their income is predictable. That might be a very noble thing you’re trying to do. It is illegal. You’re breaking the law by doing it. So watch our other webinar on the classification requirements, but first maybe talk a little bit about, before we talk about the change in the minimum for exempt, when you say compression, the rising minimum wage, so nationally, 7 25 locally could be as much as 15, even 16 or more dollars. What is this compression that you’re talking about?
SIMMONS:
Let’s just say that I’m your manager and I make $30,000 a year, which is, and our employer is calling me exempt. So I work 50 hours a week, but I still get my $30,000 a year. You are an hourly worker in New York and you’re going to get $15 an hour plus depending on where you are in the state. So now you could make more than me, but you in addition, get paid overtime if you work more than 40 hours. So now you have an employee making more than a manager. So that’s where your compression comes in. And so that’s why the federal government said, okay, we haven’t increased that minimum salary requirement in many years. We need to increase that because minimum wage in the states is increasing. That makes sense.
VANNOY:
And so I think a lot of people, again, I want to make sure people are clear, this is a show for another topic, and we’ve talked about this. Maybe we go back and do another one just on the topic of compression as local laws. So federal still 7 75, as local laws get passed and your local minimum wage goes up, you could have a situation where your hourly folks, your non-exempt folks actually start to earn as much or more than your exempt folks. And so you got to pay attention to that because you have some real equity issues that pop up just by simply following the law for your hourly workforce.
SIMMONS:
Right.
VANNOY:
So now, go ahead.
SIMMONS:
No, no. I was also going to add that there is a minimum salary now, but it’s only 35,568 per year. So if you have that hourly worker making 15 an hour, you give them some overtime, they’re going to surpass your manager pretty quickly.
VANNOY:
Yeah, that’s right. That’s right. And so a world of 7 25, this floor of, I want to make sure I get it right, $35,568, that’s the minimum for an exempt employee. There was never much risk there as the minimum wage has continued to increase. If you just do the simple math, $10 an hour, call it 2000 work hours per year, that’s a $20,000 equivalent, right? Correct. So you’re still a $10 an hour person making about $20,000 a year that’s less than the $35,000 minimum. You don’t have this compression, but now that you start to get into 15, 15 and a quarter 1550 on the minimum wage side, you start throwing overtime because of a really tight labor market and you got a compression issue that we won’t go deeper than that. That’s the topic for another day. But that’s certainly a big concern. We’ve tried to coach people up on this, but now I don’t want to make too big of a deal. We don’t know if this is going to be a real doozy that’s going to catch people flatfooted or if Department of Labor is going to give some grace on implementation time period. But what is it? What is it that you’re hearing? Share your sources so that this isn’t just some tribal just conspiracy theory stuff. What makes you believe that the minimum threshold for the minimum pay for exempt employees is going up? And what are the best guesses out there by how much
SIMMONS:
The D o L has said? And they did say the end of the summer, the beginning of September, that these changes would come out, and I haven’t seen anything definitive, but they are coming out with estimates that they’ll go from that 35,568 per year for your exempt employees. So minimally, if you have anybody today that is exempt, they have to make that. Now many states, California, New York, have a much higher threshold for minimum wage as they do for minimum salary. But federally, that’s what it is. And the estimates are that that 35 and change will go to 46 to 52,000. That’s a big difference. Mike. People are giving 5% increases. This is a 30% increase.
VANNOY:
And to be clear, we do not have a definitive number because no definitive number is available. Department of Labor has not, to my knowledge, I don’t know if they’ve signaled anything terribly specific. Do you know where the prognosticators are coming up with this range of the 46 8 to 52,000?
SIMMONS:
The Department of Labor does come out and we’ll say, this is about what we’re going to come out with. So it is out there that’s going to be the range. They haven’t settled on it, and you are correct. Usually when there’s an increase, they will say it’s going to go up by a certain incremental amount for the next two to four years. So they also have not come out with that. And even though we have all these things that are unsure, we are sure it’s going up. So what we wanted to do today for everybody was to start to prepare for this. No matter what it goes up, it’s going up more than three or 5%, which is on average the raises that most organizations give.
VANNOY:
So I want to really nail this down, and then I do want to move to the meat, which is, okay, what do you do? How do you prepare for this? You have a bunch of good advice for folks. So if you’re a white collar organization, everybody already has salaries, 50, $60,000 or above. If they’re a salaried employee, this probably isn’t going to impact you, but there’s a lot of companies that have this compression issue around hourly and exempt, but they’re going to have lots of salaried employees depending on your industry that you’re in and your geography, lots of salaried exempt employees that are going to be below the new threshold. Maybe they’re right at the threshold of $35,568. If the Department of Labor raises the new minimum to what they say the floor is 46,800, that’s like a 31% increase. There aren’t many businesses, especially small businesses that can absorb a 31% increase across the board to their employees. So this really is gigantic, right? This is a big, big potential impact. All we know is end of summer we’re here. So we would expect something any day. If it’s months from now, we have no idea, but we will take ’em at their word. Mary, do you know when they said end of summer,
SIMMONS:
They did originally say August, so that’s over.
VANNOY:
Do you know when they said that? Was that January? Was that mid last year?
SIMMONS:
The middle of the year? I should say about six months ago they started. So just
VANNOY:
Six months ago they said end of summer. So we should take them at the word that this is imminent. If they’ve offered a range, we should probably think that this is going to be at least $46,000. So if you have exempt staff that is properly classified making less than 46,000, you should expect a significant bump here. Last question before we start talking about strategies to either mitigate or prepare for this. In your experience, what would we expect? So a lot of times a new minimum wage law passes in a city or a county and they’ll declare, here’s the three year ramp where we’re going to implement this new policy. What do you think? Do you think there will be a ramp? Do you think there’s going to be a time to prepare or is it going to be, Hey guys, 30 days from now, this is the new minimum. Pay ’em. Otherwise you’re breaking the law.
SIMMONS:
I am not even going to make an educated guess there, and I’ll tell you why. One, the other things that they said they want to change, Mike is the duties test. So what are the responsibilities or the duties that an employee has to have to make them exempt so they’re going to make it more difficult to make employees exempt? So I think that it’s also going to be evident when I start helping clients figure out these new regulations that some of the people they right now have classified as exempt and rightly so, because if I’m supporting them, trust me, they’re backed up and it meets the F L SS A requirements. But if they change that, those responsibilities, you are definitely going to have people that you’re going to look at their job description and say, oops, Mike does not meet the exemption requirements anymore.
So I’m not sure if they’re going to give us time to ramp up because they’re saying they’re not just changing the salary, they’re changing the duties test, which they haven’t changed in 10 years. So I think that’s why they’re kind of delayed. They haven’t done it in so long. So will they have it ramp over time? I would hope so for the employers out there, but the added thing I don’t want people to ignore and they won’t be able to if they’re watching our webinars because you and I are going to go through it with a fine tooth comb when it comes out, is that there will be changes to the duties test.
VANNOY:
And that’s probably the biggest that maybe get soften the blow, but it not necessarily change the financial impact. Right, because I think we both know this is an area where small employers especially get in trouble all the time that they think, oh, this is a salary job. That’s an hourly job without ever examining or even knowing there is such a thing as a duties test, correct. But if the F L S A legal requirements mean it’s harder to classify someone as exempt, that means what they’re really trying to do. If you think about the big continuum, the last 80 to a hundred years of federal legislation, power just continues to shift from the employer to the employee. This is a mega trend that is happening. And I think what they’re trying to protect against, whether you agree with that or not, is they don’t want salaried employees killing themselves working 50, 60, 70, 80 hours a week and then not getting paid for the overtime associated with that labor. So I think it makes sense to me that the biggest impact here may be the change to the duties test because all of a sudden you could potentially have a significant portion of your workforce that forget the change to the minimum salary requirement. They’re not going to be exempt anymore, they’re going to be hourly employees, and if they’ve been working long hours, they’re going to be racking up some serious overtime that could really disrupt your business, forget the financial impact, who’s going to do the work, right?
SIMMONS:
Right. And look, there’s good reasons for laws like this, which is think about your fast food restaurants. Think about your retail establishments, those places that are open seven days a week, long hours, a lot of times the managers are working, I worked retail, I worked 60 hours a week and not getting compensated correctly. So that’s what I predict. We’ll see if I’m right. That’s what the duties test is going to call out, where you can make somebody exempt or not.
VANNOY:
So we know that a change is coming, we believe it’s imminent, and there’s two ways that are going to probably impact people in a significant way. One is a raising of the minimum salary requirement for exempt employees. Number two, a change to the duties test where a lot of your employees may end up being reclassified as non-exempt to become hourly and all of a sudden eligible for overtime. Now that I think we’ve painted a clear picture and hopefully not unnecessarily scared the heck out of people, but maybe appropriately depending on your situation, what is it that employers can actually do about this to start preparing?
SIMMONS:
Yeah, so that’s a really good question, Mike, and that’s all we want to do today is we want to have you start preparing. So what we’re doing with some of the clients that we support is working on their job descriptions and really looking at the specifics for a job description. Now remember, when you’re doing a job description, you look at your incumbent, but if my manager, Scott is not a tip, if he has a PhD in philosophy, but you don’t need that to be the manager of my fast food restaurant, then that does not go on the job description. So you want to look at your incumbent in your positions, but also look at the organizational needs. And I want to drive down to specifics. So if the position manages others, if you can give a range of how many people they manage, that’s going to be a big deal.
I think that that is usually the executive exemption, which is a white collar exemption under the D O L, that one of the stipulations is you manage people, but if you only manage one person, you may not meet the requirement for the executive exemption. So I want employers to really drill down. Is it possible that that person we may add to that department and they’ll manage more or they are going to manage one person, we don’t see that growing, should we be looking at other exemptions so that they meet, maybe they meet the administrative exemption. So you really have to drill down, look at every single job description and make sure, and you can only do it based on the duties tests that currently exist, but make sure you have the specifics, Mike. So the administrative exemption, one of the stipulations in that exemption is that you make independent judgment on items that affect the bottom line of the organization.
Okay, so when I’m writing job descriptions, I add examples. So you wouldn’t just take that statement out of the F L S A description of the administrative exemption and put that on a job description. I need specifics, hiring people, firing people, approving expense reimbursements, things like that are independent and they do it independently. So you really have to look at the job descriptions, make sure you have a job description for every single individual position within your organization. And if it is an exempt position, you can defend the exemption, which exemption it is. Executive, administrative or professional are the three white collar exemptions is what they call
VANNOY:
Mary. Am I thinking about it right, that people should be doing this now. They should be making sure that you have the job descriptions now and not wait for a new ruling, a new exemption requirement, a duties test to come out. Because at minimum, you’re going to need to compare the change in the law against the current. You can always then change the job description so that it lines up to the new requirement, but now you have documented path. Here’s the before, here’s the after, and here’s my documented training and communication emails, town halls, PowerPoints, whatever that might be that I have now communicated this to the impacted employees. And therefore they understand if you simply wait until the new ruling and hey, here’s the new job, you run the risk of, dare I say lawsuits for retaliation. Oh, you changed my compensation because you never liked me in the first place. Take the step of the, am I thinking about that, right?
SIMMONS:
You are. I’m just going to caution our listeners that you can change the job description, but you can’t change it just to meet the exemption. It has to be real or it won’t pass an audit by the D O L. So that’s really good point. Think like an auditor. Yes, they really do make decisions. Here’s the examples of the decisions that they make that affect the bottom line of our organization. So you can change it later. Just make sure that it’s true. Whatever you change. That’s a
VANNOY:
Really good point, and I did mean it that way, which is why I included the town hall, PowerPoint, email, whatever it is, you are going to need to communicate literally the change in their job. You’re going to literally be changing their requirements of their job and now performance management will go against that new job. So this can’t be just a administrative paper-based exercise. What they do, the legal requirement for exemption will change.
SIMMONS:
And look, we are telling clients that we work with, we look at the job descriptions every year, so I hope it’s not a surprise or something you’re adding to your to-do list to look at your job descriptions. You should be looking at them every year. A lot of organizations, the employees are remote, now they’re hybrid, some are back in the office full time. There’s a lot of things that we might be changing on job descriptions from year to year date them look at the exemption and make sure that you’re doing that every year. But this year in particular, Mike, I can’t stress enough that those job descriptions need to be looked at and can defend the exemption or the non-exempt that you have on the job description.
VANNOY:
There are 10 other really, really, really good reasons to have job descriptions, which you and I have mentioned many times in the show. But here’s a clear case for compliance reasons you should be doing it. What are some of the other things that employers should be doing to prepare for this change?
SIMMONS:
So the other thing that you want to do is a fair Labor Standards Act audit is what we call it, which is you’re going to look at your employees, who’s exempt, non-exempt, look at where the D O L may go with these salaries and who is close to those numbers. So as I said, New York, California, many other states already have a higher minimum salary. So when those went up, we did all these exercises that I’m telling you, all this prep work with those clients in those states. And a lot of times you would see, oh, I have five managers that are 10, $20,000 lower than where that minimum salary is going to go. You need to budget for that. You need to look at those managers and say, alright, does it make more sense to have them as a non-exempt employee? Are they working any overtime?
And then that’s a whole nother conversation that you need to prepare for because if you have a manager that’s on the cusp and they haven’t been signing in for their time, they haven’t been signing a time sheet and they’ve been getting salary and now maybe the duties test changes or you think that it is more appropriate at this time for them to be non-exempt than exempt, that might be a morale killer or it might hurt the morale of that particular person who’s like, wait, I’m a manager, I get salary. So you have to have a talk track that goes with that. You need to talk it through, be honest. And in some states there is a form in California and New York when you change that status, you have to have them fill it out and you have to fill it out. So it’s more than nothing to look at who’s exempt and what are their salaries and how does that compare to where the federal government may go. It’s a big deal.
VANNOY:
Yeah. Got it. What else? So an F L SS a audit. How about a payroll audit? Is that
SIMMONS:
Yes. So you definitely want to get with your payroll provider, do a payroll run. Now, I am always preaching to clients that exempt and non-exempt should sign in for their hours that they work. And I get pushback because they say, well, why do my salary? People need to sign in. This is exactly why, because you want to know how many hours everybody’s working. You certainly want to have to know for your hourly workers by law, they have to sign in, you have to pay them for every hour they work. So that’s a given and you have to do that. But are you looking at how much overtime as an organization you’re paying out? You should know that that is a cost that you want to consider. Should I be adding another employee and if I add that salary, does that offset the overtime that these two individuals won’t have to work anymore because I have this additional person?
So we should be looking at this all the time, but now what I want you to look at is if you have figures for your exempt employees and how many hours they work per week. Now you also want to look at that and say, gee, if I have a manager working 60 hours a week, it may be more cost effective for me to have their salary increase 31% than to change them to non-exempt and have them work over time. If you don’t have those, and many companies listening will not have their exempt salaried people signing in, it may be a time to just send your manager, Hey, the people that work for you on average, even though they’re salaried, how many hours a week do you think they’re working? This is something we want to know in advance, Mike, because again, there’s going to be an impact to morale to the finances of the organization. We’re going to have to change some codes in payroll, some exempt non-exempt, the code changes, et cetera. So you need to prepare for that. You need to know and budget for this.
VANNOY:
This is one of those I probably didn’t hide my eye roll very good there. From a compliance perspective, I agree with you completely, right? I mean, if you were a law firm, it’d be no big deal. You’ve got people making a lot of money that are used to punching clocks, so I will dismiss the fact that you can’t have highly compensated people punch in, punch out. I also totally understand that’s not necessarily where the culture of many, many firms is at and I think the lines of work time and personal time just continue to blur, especially as work becomes more and more virtual, more and more outside the office. Because I might be on a conference call and I’m saying kids as I’m running and doing the errands while I’m on a conference call, is that personal time? Is that work time? What about that?
I stopped working for a couple hours, but then I hop back onto email for 10 minutes before dinner and then half hour after I put the kids to bed. Am I clocking in and out all those times, it gets complex really fast. So I don’t think we’re not wagging our finger at you and saying, you must have all your employees do this. It is a recommendation, but if you don’t, you need to have some way to try to size hours worked because you’re going to have to defend this when the new duties test comes out and justify, do I pay this person more? Do I make ’em hourly and then pay ’em overtime? Am I better off having two hourly people? There’s probably going to be hard decisions have to be made,
SIMMONS:
Right? And look, I want to be clear, it’s not going to affect upper management. It’s going to really affect supervisors. Look at the salary range that we were talking about. So it’s basically in the fifties, so currently it’s 35 and change that minimally. They have to make, if it goes up to low fifties, mid forties, who’s in that range? If somebody’s already making 80,000, you’re right. This is probably not going to affect them depending on how much that duties test changes. But the other individuals, you should have a general idea of how many hours they’re working. But I’ll go back to your question about hours. Worked for an hourly worker. Every, all of their work has to be paid. If I work my 40 hours and I go home and I have to log back in to do a report for you, I am paid for that time. Your salaried workers, the concept is you are paid a salary for one week of time. You’re exempt from overtime so I can have you work as much as I want in that week. And I think the D O L is saying, well, again, it’s really not fair for people to work 60 hours, 70 hours a week like I did when I was in retail and not get overtime. So this is their correcting some of those extremes.
VANNOY:
I think it’s a fair point. I think anybody, your VP levels probably all make more than this is going to be a non-issue, but then probably it’s frontline managers and really varying by industry. If you’re a manager of a software development firm, you probably make more than this and it’s a non-issue. But if you’re working retail, food service, hospitality, there’s plenty of college educated, sharp people with 10 years experience in those industries that just simply don’t pay as much because that’s the industry, what the industry bears that are going to be in this zone of consideration.
SIMMONS:
It’s very true.
VANNOY:
Mary, what else could employers do to try to get ahead of this? I think it’s going to be certain industries, especially I just mentioned, I think some of them, but really anybody that has employees that are going to be kind of in this bubble, what other guidance would you be giving them right now?
SIMMONS:
I think that you want to think ahead to your talk track to maybe there is a town hall like you said, but every who’s going to be impacted positively or negatively needs a one-on-one closed door meeting to discuss it. And I’m a firm believer in this is a federal requirement. You might have people getting huge raises and that’s a great conversation, but you might have some people that you’re changing from exempt to non-exempt, like we said, now they have to sign in. I think that there’s sometimes for some people might think that that’s a negative. So how can you present that in a positive tone, but be transparent. Don’t try to hide the fact that they may be frustrated by that. Let them voice their concerns. So you need to think about what you’re going to say. And again, when we do management training, you never want to blame it on, oh, my boss made me decrease your salary.
The federal government made me make you hourly. That doesn’t help you and it doesn’t help the employee. They need the full transparency of what happened and why it happened. So I would start thinking about those conversations, who’s having those conversations? I would not leave it to chance. I would make sure that there was a talk track for those managers. We are writing up a script and we have in the past, here’s the paperwork you need to give the employee. Here’s the script that you want to say, and then you always need somebody for them to go to. It’s usually my team, and that’s fine. If you have any further questions, call hr, email hr, but they should start to think about those conversations. In some cases it’s going to be great news. In other situations, it may be perceived as possibly not. Great news.
VANNOY:
One last topic I want to spend a few minutes on before we wrap. We talk about this notion of compression, right? So compression has traditionally meant I’ve got my hourly employees and when, again, if the minimum wage is 7 25, that means, and they work 40 hours a week for no overtime. You’re talking people 15, 16, $17,000 a year, and so well below the 35 some odd thousand dollars of the minimum threshold for salary, but you get compression when minimum wage goes up in. Sometimes people could be making as much as hourly as salary. And so how to deal with that compression for job descriptions, banding, how do you pay your employees fairness, et cetera. You got to keep in mind now, so let’s say you’ve got a swath of employees and maybe that swath is one or two people, but you’ve got a band of employees that are making this 35 to $40,000 a year.
They’re at the bottom end of the scale of exempt salaries and maybe you have a next level up management tier that is in the 50 55,000 salary. The law’s going to say the minimum goes up, but this is going to create compression for your next level up as well. And so if the old person was making 40 and your level two manager makes 60, but now the law requires you to pay 55, now all of a sudden you just have this little tiny gap between a junior manager and a senior manager perhaps, how would you coach folks to be thinking about that in preparing for those conversations?
SIMMONS:
This is a great topic because it’s going to be a difficult one, and that’s why we wanted to prepare employers for this. First piece of advice I would give Mike, is to not lower the salary of the incumbent, not try to contract around the law and say, oh, well now I don’t think that you are exempt. I’m going to make you non-exempt and not allow any overtime and I’m going to keep you at 40,000 so that they don’t leapfrog or get too close to their manager. I also wouldn’t take money away from an employee and I’ve seen it, so please don’t do that. So you’re just going to have to prepare for this, but there will be some instances where that lower level manager, you may say, now it does make more sense. I’m going to keep them at their salary because now with the new duties test, they’re not exempt. But if they work overtime, you got to watch that too. So what’s the right thing to do? That takes a lot of planning and that’s why you have to start now with your job descriptions, your F L Ss a audit, your payroll audit, and look at those salaries and what’s coming down the pike.
VANNOY:
Yeah, I think the punchline for everybody is if you don’t understand the difference between exempt and not exempt, you got to understand it is a really just, it is a fundamental tenant of the Fair Labor Standards Act. By law, you are required to classify all employees as one or the other, and the minimum salary requirement, the pay salary requirement is increasing. We believe it’s imminent. This isn’t our opinion. This is what the Department of Labor has signaled they said end of summer. So that’s basically now, so this is imminent and they’ve given us a range for what it’s going to go to. And for some of you who have salaried employees who you’re paying at the bottom of that range, this could be as much as a 30% or more increase. This is going to have big impact budget for you, psychological impact on employees if you reclassify them, psychological impact on higher salaried employees because now there’s compression as why did that person make as much as I do? This is a bit of a hornet’s nest for folks who have a lot of employees that are in these ranges. So the best advice we can give, I’ll let you recap off. You rattled off three, I think, excellent things for employers to be thinking about in preparation here.
SIMMONS:
And I just want to add one thing, Mike. I sit in New York and for three years, our minimum salary has been higher than federal, three or four years. So New York employers might be going, ah, this doesn’t affect me. Same with California, Washington State, quite a few states, it may impact you. Please don’t ignore this piece of legislation, and we will go over it in great detail when it comes out. But when that duties test changes, Mike, every employer needs to look at it because even in New York, it might change your exempt employee to, right? And that’s where the lawsuits are. Mike. Mike, the anti-harassment lawsuits get all the publicity, but the less exciting wage and hour claims far exceed those claims because people get this wrong all the time. It is confusing. That’s why we’re taking our time to prepare you. So you asked to go over it one more time.
I want you to make sure that you are classifying your employees who’s exempt, non-exempt. Look at your job descriptions. Make sure your job descriptions can defend, think like an auditor can defend the classification that you gave your employee while you’re at it. Make sure you’re paying them right, okay? So you’re not giving days off instead of giving overtime. If somebody comes in early and clocks in and starts working early, you have to pay them, Mike, even though you can’t say, well, they weren’t due until nine. If they start working, you pay them. So look at your pay practices, look at your job descriptions. Do an audit of what are your exempt and your non-exempt employees making? Who’s working overtime? How much overtime and can I get my arms around, even my exempt employees? How many hours are they working? This is going to prepare you for these changes coming down the road. And then our next webinar will help you even further to make sure that you’re meeting all those requirements.
VANNOY:
And as soon as it comes out, we’ll let you know and we’ll put that as probably the number one priority because there probably will be nothing bigger in the payroll HR world. That’s when that announcement comes. So we’ll unpack the details for you at that time. Until then, hopefully this was helpful and you guys can at least be aware of this pending change and start to prepare the best you can, Mary. Thanks as always, and thanks for everybody else for joining us today. Until next week,