Are you ready for the new FLSA overtime rule?
- By Rock Regan
- Jul 11, 2016
Dec. 1, 2016. If you’re like many other state and local government agencies, just the thought of this date is enough to make you shudder.
Why such dread? For anyone still unaware, this marks the deadline to comply with new updates to the Fair Labor Standards Act (FLSA), changes that will reclassify a significant portion of employees eligible for overtime pay. For many government agencies, this means devising new strategies, modeling various scenarios to make the right decisions and, ultimately, making sure they are in compliance with this update.
One thing is clear: Failure to comply is simply not an option. For example, FLSA lawsuits have increased 400 percent in the last 15 years, and FLSA violations have been found in 79 percent of agency-initiated investigations. Non-compliance can be financially devastating -- in terms of fines, penalties and employee lawsuits -- and can tarnish an organization’s reputation. With FLSA scrutiny and consequences at an all-time high, government agencies must start planning to comply with these changes.
Choices, choices, choices
State and local government agencies have a number of options to consider when developing the best possible response to these FLSA updates. They can, for example, promote a segment of employees to increase their salary to exceed the overtime threshold. This added cost might be justified in return for the increased employee morale, engagement and service that will result. They can also look to reduce or eliminate the need for overtime, simply choose to pay overtime or just about any combination of these solutions.
All of these scenarios have pros and cons, but when it comes to keeping costs low while still providing continuity of services, what is the right decision?
At first glance, the FLSA changes seem straightforward, but unfortunately, they raise questions as state and government agencies wrestle with how they should comply. These organizations are asking themselves:
- What is the best strategy for us to comply with these changes?
- How can we calculate our total costs for each scenario?
- Do we have the data and systems to make the right decisions?
- Can our supervisors make sure part-timers don’t exceed thresholds?
- Can we produce reports to prove compliance?
- Are we at risk of not delivering optimum citizen service?
Unfortunately, too many government agencies are unable to answer these questions, usually because they have a hard time getting the right data. Many still rely on manual systems, paper-based approaches or disparate legacy systems that can’t provide reliable data for creating effective FLSA strategies, let alone monitoring them and proving compliance.
A focus on workforce management data
One answer is to gain real-time visibility into comprehensive employee data -- especially information related to time and attendance, scheduling and payroll -- using workforce management or human capital management solutions. These solutions can provide critical insight into employee data, helping government agencies track and report on hours worked, understand potential costs and minimize their overall compliance risk.
The Department of Labor projects that 4 million employees will be affected by the FLSA changes. With so many more employees becoming eligible for overtime, state and local government agencies need a better way to track and manage hours worked by affected employees. Workforce management solutions let them accomplish this goal and achieve much more.
For example, when it comes to planning for FLSA, workforce management solutions can help:
- Identify which employees could potentially be affected by the proposed changes.
- Track the time of employees who will be considered non-exempt under the new FLSA rules.
- Factor in full compensation, including bonuses, accruals, comp time and other benefits.
- Provide detailed records and a full audit trail for compliance efforts.
Additionally, these solutions automate key workforce management processes, allowing supervisors to spend more time on higher value initiatives and driving higher employee engagement.
Plan to succeed with workforce management
Workforce management solutions can help state and local government agencies develop and implement the most effective FLSA strategy. These solutions provide a better way to track employees’ time, automate the process of enforcing overtime rules, and offer a single reliable record of all employee information that documents that policies are applied consistently and fairly throughout the entire organization. Like the old saying, “knowledge is power,” workforce management solutions give government agencies an extremely effective way to comply with the FLSA updates.
Rock Regan is the director of industry marketing and strategy, government and education at Kronos Inc.