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Business Consulting

October 2019: The New Overtime Rule

By | Business Consulting, Human Resources, News

Contributor: Kevin Grey, Warren Whitney’s Human Resource Director

WHAT BUSINESS OWNERS NEED TO KNOW

On September 24, 2019, the U.S. Department of Labor (DOL) announced a final rule increasing the earning threshold to exempt executive, administrative, and professional workers from the Fair Labor Standards Act (FLSA) minimum wage and overtime pay requirements.

The new rule, effective January 1, 2020, raises the federal overtime exemption threshold from $23,660 per year ($455 per week) to $35,568 per year ($684 per week). This law was last updated 15 years ago.

To better understand the new overtime law, Warren Whitney’s Human Resource Director, Kevin Grey, explains:

  • The meaning of the new federal overtime rule
  • Ways to be cost-effective
  • How to communicate the change to affected employees
  • Penalties for non-compliance

 1) The meaning of the new federal overtime rule

This law impacts employees currently classified as salary exempt that are making over $23,660 a year and under $35,568 a year. For these employees, you will be required to:

  • Reclassify the employee as non-exempt (if appropriate).
  • Compensate the employee at time-and-a-half as overtime pay for any hours worked in excess of 40 hours a week.

Employers should analyze their salary exempt workforce in consideration of the new threshold and communicate any changes to the affected employees before it takes effect on January 1st, 2020. This is a good time to update your position descriptions as you conduct your review.

There are additional provisions under the final rule to consider:

  • The duties requirements for these employees remains the same.
  • Non-discretionary bonuses and incentive payments (including commissions) may be used to satisfy up to 10% of the new salary level requirement.
  • The annual salary level for classified highly compensated employees is being raised from the current level of $100,000 per year to $107,432 per year.
  • The final rule does not include automatic increases to the threshold.

2) Ways to Be Cost-Effective and minimize the impact on your balance sheet

 i. Pay Overtime as Necessary

If your employees typically work 40 hours a week and occasionally or seasonally work overtime, it might be advantageous to reclassify them as non-exempt. In this scenario, you would budget for overtime instead of raising their yearly salaries above the threshold. Limit workers’ hours to 40 hours a week. If possible, redistribute workloads to ensure that non-exempt employees remain within a 40-hour workweek.

ii. Hire Temporary Workers

To limit your non-exempt employees to a 40-hour workweek, you may find the need for the occasional temporary worker to meet business demands. Hiring temporary workers can be more cost-effective than either raising salaries to be above the threshold or paying overtime.

iii. Raise Salaries above the Threshold

If you have employees consistently working more than 40 hours a week and these employees are already being compensated at or near the salary threshold, it might be worth considering raising salaries above the $35,568 threshold. However, keep in mind that the employees’ duties must pass the Duties Test required by the FLSA. In the event of a DOL audit, the job description must support the exemption. If it is not within your budget to increase salaries, you will have to reclassify the salary exempt positions to non-exempt.

3) Be sensitive when communicating the change

There are employees who tie professional esteem to being salary exempt. If you determine that paying on an hourly non-exempt basis is more cost-effective for your business, be sensitive to the affected employees when communicating the changes.  Even if there is no change to their income or duties, they may perceive their now non-exempt position to have less professional status.

In Virginia’s particularly tight labor market, effectively disseminating information to your workforce is important to ensure your employees don’t feel slighted as your business moves to ensure compliance with new regulations.

 4) DOL Penalties for non-compliance under the FLSA

Penalties and sanctions for non-compliance with the FLSA are severe and aren’t a risk worth taking. In addition to the back payment of lost wages to all affected employees, willful violators may be prosecuted criminally and fined up to $10,000. A second conviction of violating the FLSA can result in imprisonment. Employers with repeated violations may be subject to fines of $1,000 per incident.

All businesses must comply with FLSA rules to not only avoid penalties and/or sanctions but to also protect their most important investment; their employees. Warren Whitney’s Human Resource professionals have hands-on experience helping organizations with HR compliance. If you have questions about the new overtime rule or other compliance-related issues, please contact Kevin Grey at 804.282.9566 or kgrey@warrenwhitney.com.

Learn more about Kevin Grey www.warrenwhitney.com/kevin-grey/

June 2019: Our clients share how we are MAKING POTENTIAL HAPPEN

By | Business Consulting

 

In celebration of our 30th Anniversary, Warren Whitney wants to recognize and thank our clients for the opportunity to become a trusted advisor and valued partner. We invite you to watch this video that speaks to the work we have done for a group of our clients.

We are grateful to Trinity Episcopal School, Luray CavernsChild Savers, and Frazier Quarry for sharing how Warren Whitney is Making Potential Happen.

April 2019 Newsletter: Warren Whitney is Celebrating 30 years of MAKING POTENTIAL HAPPEN

By | Business Consulting

 

Thirty years ago, Warren Whitney was founded with the goal to provide a greater impact to clients than traditional consulting. Pioneers in the industry, Scott Warren and Katherine Whitney created the fractional C-suite concept, a revolutionary idea that has gained traction ever since. While the firm has adapted over the years to changing environments, it has stayed true to the integrity of the business model:

Offering value-added, tailored solutions by partnering with our clients to earn trust and respect through our actions.

The firm’s unwavering commitment to being a trusted adviser and valued partner is part of Warren Whitney’s DNA. Cyndy Lowery, a Partner at Warren Whitney, explains: “We work to bring value to our clients every day by collaborating with them to offer tailored solutions. Our professionals make a difference by getting in the trenches with our clients. We don’t tell them what to do, we lead them through it. We routinely hear from our clients ‘thank you, you made a difference.’ ”

Warren Whitney is proud of the work they have conducted with over 800 clients during the past 30 years. As they celebrate this 30-year milestone, the team looks forward to serving you and your business to MAKE POTENTIAL HAPPEN.

Please enjoy this video about Warren Whitney to learn more about us.[/vc_column_text][/vc_column][/vc_row]

Warren Whitney named 2019 Best Places to Work in Virginia

By | Business Consulting

2019 Best Places to Work in Virginia

Warren Whitney was recently named as one of the 2019 Best Places to Work in Virginia. The annual list of the Best Places to Work in Virginia was created by Virginia Business and Best Companies Group.

This statewide survey and awards program is designed to identify, recognize and honor the best places of employment in Virginia, benefiting the state’s economy, workforce and businesses. The 2019 Best Places to Work in Virginia list is made up of 100 companies.

To be considered for participation, companies had to fulfill the following eligibility requirements:

– Be a for-profit, not-for-profit business or government entity;

– Be a publicly or privately held business;

– Have a facility in the state of Virginia;

Be in business a minimum of 1 year.

Companies from across the state entered the two-part survey process to determine the Best Places to Work in Virginia. The first part consisted of evaluating each nominated company’s workplace policies, practices, philosophy, systems and demographics. This part of the process was worth approximately 25% of the total evaluation. The second part consisted of an employee survey to measure the employee experience. This part of the process was worth approximately 75% of the total evaluation. The combined scores determined the top companies and the final ranking. Best Companies Group managed the overall registration and survey process in Virginia and also analyzed the data and used their expertise to determine the final ranking.

The final rankings will be announced at an awards luncheon on Feb. 1, 2019, at the Boar’s Head Inn in Charlottesville.

For more information on the Best Places to Work in Virginia program, visit www.BestPlacesToWorkVA.com