A new survey from the Society for Human Resource Management shows that the vast majority of HR managers review whether their employees are exempt from overtime pay regulations. But the regularity with which they assess varies greatly and a small percentage pay no attention to the issue at all.

In anticipation of a proposed Department of Labor rule that will raise the salary threshold for workers exempt from overtime pay regulations, the exemption status of employees is a particularly sensitive issue for SHRM, which has strongly opposed the rule change, saying the threshold is being raised too high.

The bill would also include a provision to adjust the salary threshold every year. After more than a decade at $23,660, the threshold is more than doubling to $50,440 for salaried workers in 2016, but will likely increase with the rate of inflation thereafter. That means it’s important for HR managers to monitor their positions to understand how much the company can anticipate to pay in overtime, if at all.

Luckily, said the organization, HR managers appear to already be in the habit of keeping tabs on the issue. In its poll of 337 HR professionals,

53 percent said they review when the position becomes open
39 percent said they review annually
2 percent review monthly
6 percent never review

Those polled also said they expected a big impact from the overtime changes. This is what they foresaw:

Possible unbudgeted overtime costs (76 percent)
Possible increase in opportunities for employees to earn overtime (70 percent)
Potentially less workplace and scheduling flexibility for employees (61 percent)
Potentially fewer opportunities for career advancement in the company (42 percent)

Regularly reviewing the status of employees does not necessarily just involve checking up on their salaries. In some states, employees are subject to different thresholds based on their work duties. In states with stricter duty rules, such as California, HR managers would be wise to regularly assess the duties of their employees, SHRM said.

Robert Boonin, an attorney for Dykema, a Detroit-based company, told SHRM that while he found it troubling that some HR managers aren’t reviewing exempt statuses regularly, a monthly review would be “overkill.”

“If less often periodic reviews are performed correctly and thoroughly, it will be unlikely that jobs will change greatly from month to month so as to change the outcome,” he said.

Instant Insights /

Employers aware, concerned about overtime exempt status

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