Sibson Consulting: Time for Organizations to Examine Impact of New Overtime Pay Rules

NEW YORK--()--The final rules on overtime pay under the Fair Labor Standards Act (FLSA) have been released. Human resource professionals should be vigilant in determining the law’s impact on their organization. Given that the rules take effect on December 1, those who have not completed an impact analyses and implementation strategy should make that their immediate next steps, according to Sibson Consulting.

“Potential salary increases for exempt employees under the salary threshold of $47,476 is one factor that may have a significant financial impact on organizations,” commented Carolyn Wong, senior consultant at Sibson in New York. “The changes will also lead HR professionals to look more closely at the number of hours worked to estimate potential overtime payments, if employees are reclassified as non-exempt and any salary compression concerns.”

The financial impact will be just one potential effect of the final rule. “The changes will likely pose a number of challenges, and an organization’s implementation strategy should consider a range of factors,” said Jennifer Donnelly, vice president and leader of Sibson’s Organizational Effectiveness Practice. She said that these factors include timekeeping processes, potential equity issues, impact on career paths and succession plans, challenges to recruitment and retention efforts and potential impact to employee engagement and morale. “Ensuring an effective approach to change management, a timely, tailored employee communication strategy to ease anxiety, and comprehensive training for managers and leaders to ensure compliance with FLSA standards will be critical,” she added.

What other ways might the final rule on overtime pay affect organizations? For further information, or to speak further on this topic with Ms. Donnelly or Ms. Wong, please contact Todd Kohlhepp.

Sibson Consulting (www.sibson.com), a member of The Segal Group, provides strategic human resources solutions to corporate and non-profit employers and professional service firms. Sibson's services include benefits, compensation, talent and performance management, communications, sales force effectiveness and change management.

Contacts

The Segal Group
Todd Kohlhepp
Public Affairs Specialist
T 212.251.5087 | M 347.957.1499
tkohlhepp@segalco.com

Contacts

The Segal Group
Todd Kohlhepp
Public Affairs Specialist
T 212.251.5087 | M 347.957.1499
tkohlhepp@segalco.com