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Update on Exempt Vs. Non-Exempt

Kathryn Carlson /
  • Categories: HR
employee classification

The United States House of Representatives passed a bill Sept. 28 that would delay by six months the effective date of the Department of Labor’s (DOL’s) new overtime regulations after small businesses argued that the original deadline would force them to lay people off. It is doubtful that this will have any impact on the regulations taking effect on December 1st. This is viewed by many experts as a “symbolic” gesture.

Employers should continue to prepare to implement required changes on December 1st. These changes include the federal annual salary threshold for employees exempt from overtime pay will double, increasing to $47,476 from $23,660. Employees who make less than the threshold must be paid time-and-a-half for any hours worked beyond the 40-hour workweek with some exceptions bases on industry and specific job types. The Department of Labor has estimated that the it will take employers on average an hour to review current employee salaries and job duties to determine if changes will be necessary, however KPA’s experience in assisting clients along with reports from other HR consulting and software firms indicate that the amount of time is more likely to be 4-8 hours depending on the size of the employee population.  KPA offers a classification wizard in the HRDrive program to assist with classification along with access to certified HR professionals to assist clients in analysis and implementation.

View our on-demand webinar on “Exempt vs. Non-Exempt Employees: Minimizing the Impact to Your Bottom Line” under the Insights tab to learn more about how these changes will impact your business.

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