The Department of Labor announced the details of itsnew rule on overtime pay, which hasincreased the salary threshold for employees eligible from $23,660to $47,476.

There will be no change in the duties test to determine whetheremployees earning more than the salary threshold must be classifiedas exempt from overtime; however, the threshold will be updatedevery three years.

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The new rules will take effect on December 1, 2016.

The new rule comes with good intentions, as wages have either stagnated or declined since 1979.However, there has been much debate about the benefits that theseupdated regulations will bring.

Many businesses have voiced concerns that it will significantlyincrease payroll costs, disproportionately impact industriessuch as retail and nonprofits, and even fail to help thelower-income workers as businesses will be forced to cut costs andreduce wages and fringe benefits.

It’s no surprise that many businesses are bracing themselves forthe extent that the overtime rule will affect them. Most certainly,there will be additional time and costs involved in assessingpayroll costs, potentially reclassifying workers, ensuring wage andhour compliance, and communicating the impact of the rule acrossthe organization.

The Department of Labor estimates that employers will spend $592.7 million to complywith the new rule.

The question is: Once the rule has been enforced, how much willyour business really stand to lose or gain from the overtime payrules?

Here are the seven extra costs that could impact your approachto addressing overtime pay and that could affect your bottomline.

1. Hourly wages and salaries

One of the first things that you will need to do ahead of theovertime pay rules taking effect is to review workers’ pay who areon cusp of the salary threshold.

Some employees may require salary increases so that the workerremains exempt from overtime, while others could be reclassified asnonexempt workers.

Another aspect to scrutinize is not just the number of hoursthat people are working, but the type of work that is beingconducted. For example, are some of the activities that are beingperformed menial tasks that could be eliminated or delegated toothers so that employees can also spend more time working on morecritical and strategic activities?

2. Employee benefits

Any changes to an employee’s salary could affect what benefitshe or she has, and what it means for overall payroll costs. In somecases, benefits could be eliminated with the overtime payreforms.

While some benefits – such as family and medical leave – aremandatory under federal or state law, others – such as medical,disability or dental insurance are optional.

Again, some workers who are reclassified as nonexempt may findthat they are no longer entitled to some bonuses – however, whetherthese benefits should be retained is part of a bigger considerationwhen it comes to staffing costs and employee morale.

3. Employee retention and morale

If your business decided to reclassify workers and notify themthat their salaries don’t meet the federal threshold to remainexempt, this could significantly impact employee morale.

Some people may feel resentful if they are reclassified ashourly workers, as it can be perceived as a demotion, mostly due toa greater lack of flexibility in their work hours and a perceptionthat they are no longer considered part of management.

As a result, some people may even consider leaving the company,which can affect other employees. Ahead of any changes, employersshould take the time to explain the changes to their employees inresponse to the Department of Labor rules, and take the time toanswer any questions or concerns.

4. Time-tracking systems

While virtually every industry has time-tracking systems, notall companies require their employees to capture when they arepunching into a shift, or how many hours they are working eachday.

With the new overtime pay rules, this will inevitably change asmore people will need to track their time.

Fortunately, time-tracking systems have evolved so that they nolonger are standalone solutions - thanks to cloud and mobileadvancements, you can scale and integrate your systems in aninstant.

There is a long list of systems available in the market today totrack time. To support the needs of your workforce, the bestsolutions are highly configurable to capture and manage hours basedon your needs, integrate with payroll systems for quick processing,and have an easy-to-use interface available anywhere, anytime.

5. Employee training

If your company needs to expand its time-tracking systems tomore employees, many companies will also need to take the time totrain workers on how to capture, manage, and approve hours.

Perhaps for the first time in their careers, reclassifiedworkers will need to track when they start and finish work, as wellas meal and rest breaks. The same people may also need to reviewand approve their co-worker’s timesheets.

An excellent time-tracking system will be intuitive in how itmonitors hours. However, you’ll need to identify the nuancesin people’s roles and familiarity with submitting and approvingtime, in line with your corporate policies and requirements.

6. Office space and/or travelexpenses

One of the tough issues to grapple with when the overtime rulestake effect is how to treat remote workers.

In our 24/7, always-on economy, we are accustomed to peoplechecking emails and taking phone calls after hours. Astelecommuters don’t work in the office, a concern is that theycould underreport hours worked and then later claim that theyworked off-the-clock at overtime rates.

This has led to some industry experts predicting thatemployers will eschew telecommutingpolicies and encourage employees to work more from theoffice instead. Again, it is important to know the nuances of howthe new rule will impact your organization - and who will beaffected.

7. Legal consulting fees

In fiscal year 2015, the Department of Labor’s Wage and HourDivision found a whopping 10,496 cases in overtime pay violations, totaling over$137.7 million in back wages owed to employees.

Any costly and time-consuming lawsuits can also have furtherrepercussions on a brand’s reputation, so it makes sense to bringon additional legal resources to ensure that you meet your wage andhour obligations.

No matter what side of the fence you’re on, your business shouldestablish a clear action plan to address the new overtime rules andunderstand how it affects your staffing and budget. While manycompanies could face an uptick in costs at the onset, there are alitany of benefits from the new rules in the longer term.

Rather than feel overwhelmed by a slew of possible extra costs,the new rules pose strong benefits in setting up solid processesand systems to ensure wage and hour compliance.

By gaining deeper insights into how people spend their time andfinding ways to optimize their working hours, there’s a distinctopportunity to see this as a positive opportunity to drive greateremployee engagement and wellbeing, productivity and profitabilityfor your business.