July 22, 2016 | Peter Corless
July 22, 2016 | Peter Corless
Overtime has always been a concern for senior care communities as they strive to manage their labor budget as efficiently as possible. However, the Department of Labor’s (DOL) new overtime rule has reinforced the need for strict management of overtime. In fact, the results of two recent surveys revealed that the new overtime rule is top of mind for executives in industries across the board, and especially those in senior care.
The July 2016 Littler Mendelson Executive Employer Survey Report stated that “employers expect a continued crackdown by the DOL, likely driven in large part by the recently revised overtime regulations. This year, 31 percent of respondents said they expect DOL enforcement of federal employment laws to have a significant impact on their workplaces – up from 18 percent last year.”
A separate survey by Ziegler, specifically of senior care CFOs, “gathered feedback on the impact of the Department of Labor’s overtime ruling, which will become effective on December 1, 2016. About 73% of the CFOs indicated it will have a moderate to significant negative impact on its organization.” In fact, senior living CFOs were more concerned about the overtime rule than minimum wage increases.
So what can senior care leadership do to prepare?
Understand the rule.
Under the new overtime rule, the threshold for employees who are entitled to overtime increases. The increase in the threshold is almost double-- from less than $455 per week to $913 per week (or from $23,660 per year to $47,476). Starting December 1, 2016, employees who earn yearly salaries of $47,476 or less will be entitled to paid overtime if they work more than 40 hours a week.
Eligibility for overtime is open to almost anyone making less than the $47,476 threshold—regardless of title, job description, or managerial status. The main exceptions are those who aren’t covered by the Fair Labor Standards Act (FLSA), the federal law that sets overtime rules and other labor standards like the minimum wage.
As you familiarize yourself with these new regulations, remember that state regulations may be different from the federal rule. Take into account that if the state directives are more generous to the employee, those are the one you will need to follow.
Take action now.
Legislation has been proposed to slow down the implementation of the new overtime rule and phase in the salary increases over the next three years to give businesses time to adjust. However, that legislation is still pending and may not pass. Senior care providers should start now to define their strategies and get prepared. Here are five things to check off your list before the new rule comes into effect.
The seriousness of preparing for this new rule can’t be overstated. Employers found to be non-compliant could face significant fines and/or legal action. Make sure you are ready to meet all new requirements in December!
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About Peter Corless
Peter Corless is Executive Vice President of Enterprise Development for OnShift. Peter is a recognized HR leader in post-acute care and is well-known for his achievements at some of the country’s largest post-acute care organizations, including Kindred Healthcare and Genesis HealthCare. As an experienced, chief administrative and human resources officer within these organizations, he developed strategies that reduced turnover, improved recruiting and hiring strategies, and reduced labor costs.
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