As December 1st quickly approaches, more questions circulate on best practices for adjusting to the new overtime law. This is a significant change for employers, especially for organizations in manufacturing, retail, customer service and hospitality industries. In anticipation for the new overtime law changes, employers will need staffing agency services to hire contingent workers to maintain productivity while keeping their permanent employees compliant. If organizations need additional hourly employees, this presents an incredible opportunity to increase sales and generate more job orders.
As a staffing agency, it is important to understand the changes in regulations and their potential impacts as you discuss these with customers and prospects. It is critical to remember, however, to avoid giving legal advice or anything that could be perceived as such.
Try these three key informational points and tips to help you start a conversation with your customers and prospects about the new overtime laws:
Changes to lessen its impact on your bottom line
Salaried employees making less than $47,475 annually will receive overtime compensation, but the complex details on exceptions and factors such as commission make implementing payroll changes a headache. These processes and oversights can be tedious and time-consuming, requiring flexibility and a different business approach. Businesses are having to be creative in their methods to handle this new law and to lessen its impact on their financial and staff resources. Some approaches organizations can take to deal with this law include:
- Hire additional staff to help handle the workload
- Determine if paying overtime is a cost-effective option
- Cut back on benefits
- Analyze workflows and streamline processes
- Adjust bonus and commission plans keeping in mind that these payments cannot exceed 10% of an employee’s salary to count toward exception.
Remember other job activities that are compensable
To make sure your contingent employees are paid correctly, familiarize yourself with other job-related activities that the FLSA requires compensation for.
- Travel time
- Being On-call
- Mandatory training
- Preparatory and concluding activities
Be prepared for an audit
With new overtime rules, companies will be closely looking at their payroll practices to ensure compliance. In the case of undergoing a Department of Labor (DOL) audit, the process may consist of extensive interviews and reviewing company wage data. If a company is found non-compliant, costly fines and a FLSA lawsuit could be potentially enacted. To decrease the chances of having a DOL audit, an annual internal audit of your payroll practices measured against the new regulation will be helpful.
- Ensure job descriptions have been updated and are accurate
- Consult with an attorney on potential white-collar exemptions
- Update office policies as needed
- Confirm necessary employment postings are visible to employees
In summary, as workforce providers, it’s important to stay educated on labor law updates to maintain compliance and to protect your agency’s reputation. This knowledge gives you the opportunity to be seen as the go-to-resource for information. Armed with this knowledge, you and your sales team can also promote your solutions to manage these changes.
Do you know if your agency is ready to handle the changes with the new overtime law? Your ATS software should streamline complex processes, save you time and decrease compliance risks. To discuss the challenges you face with this change and to get more information about how Bond help, schedule a demo with us today!