The pool of workers eligible for overtime pay will grow, starting in December, thanks to changes to the federal Fair Labor Standards Act (FLSA). The changes, announced in mid-May, are part of the Department of Labor’s (DOL) final rule updating the overtime regulations. The changes will automatically extend overtime pay protections to over 4 million workers during the first year of implementation.

The final rule doubles the salary threshold that determines overtime coverage. It substantially expands the pool of workers eligible for overtime. Under the new rules, any salaried employee earning less than $47,476 annually would be entitled to time-and-a-half for work that exceeds 40 hours per week. Currently, the salary cutoff for overtime pay is $23,660. The final rule is scheduled to go into effect Dec. 1.

Dena Sokolow, an employment attorney and shareholder with the law firm Baker Donelson, answers GPN’s questions below.

GPN: What steps can local governments take to comply with the new U.S. Dept. of Labor overtime rules? Offer comp time? Raise workers' pay so they stay exempt?

Dena Sokolow: There are various options available to state and local governments to comply with the new overtime regulations. The DOL does not dictate what option employers should use. Of course, employers can convert employees who do not earn the new salary threshold to hourly, and pay overtime or comp time at a rate of time and a half. There is no requirement, however, that newly classified non-exempt employees be converted to hourly.

The DOL allows non-exempt employees to be paid salary as long as the employee receives overtime premiums for all hours worked in excess of 40 per week. State and local government employers can continue to pay newly classified employees a salary and pay overtime, or provide comp time for overtime hours in excess of 40 per week. There is also the option of trying to maintain the exempt status by raising salaries to the new $47,476 salary threshold. However, due to state or local budgetary restrictions, this may not be an option for every government agency or employee.

GPN: Will cities/counties need to track employees' hours more closely and rely on worker time tracking systems?

DS: For non-exempt employees, the DOL requires an employer to keep an accurate record of the daily hours the employee actually worked. If an employee works a fixed schedule that rarely varies, the employer may simply keep a record of the schedule and indicate the number of hours the worker actually worked only when the worker varies from the schedule. For an employee with a flexible schedule, the timekeeping does not need to reflect each time an employee signs in or out when the employee starts and stops work.

What is important to track are the total daily hours that the employee actually works. Employers will also need to closely monitor newly classified employees. Prior to the overtime law change, these employees were exempt and therefore, not required to keep track of their hours. They may have regularly performed work outside normal working hours (such as taking home documents to read, sending emails or making work calls).

Since the newly classified employees are now entitled to overtime for all work performed in excess of 40 hours, that after-hours work would be compensable time. It is important to monitor the re-classified employees to make sure they are tracking those hours correctly.

GPN: Do you have any advice for governments on how they need to respond?

DS: Although employers do not need to be in compliance until December 1, 2016, now is the time to start analyzing their workforce and the impact this new rule will have. This is the optimal time to review the efficiencies in the workplace and determine whether job duties should be realigned or workloads re-distributed, whether staffing levels are appropriate, and whether employees are managing their time well.

Unlike private employers, state and local government employers have an extra tool in their arsenal to comply with these regulations -- they can provide comp time rather than cash overtime payments.


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