Coping With Changes in Overtime Pay (Part 2: The Right Tools Help)
Yes, I do have a life, yet one of my favorite past-times is tracking Fair Labor Standards Act (FLSA) changes and how they impact employers. (There is no accounting for taste). I’m interested in the FLSA because the rules promulgated under the act are always changing, the courts are constantly finding new ways to interpret the law, and employers are left to cope with the change. A case in point is the recently proposed change to the overtime exemption salary threshold from $23,660 to $50,444.
The rule is subject to a 60-day comment period, so while the actual dollar amount of the threshold may be slightly different, we can safely assume that in a couple of months the amount – scheduled to be effective in 2016 – will be significantly higher than today’s threshold.
The altered rule is an excellent example of the need for a comprehensive and flexible HCM tool employers can use to help them manage their workforce. With regard to the overtime exemption rule, the tool should provide support in several key areas.
First and foremost, employers are going to be even more keenly interested in managing employee schedules, especially for employees who in 2016 – because of the increased overtime exemption salary threshold – will be eligible for overtime pay. The best HCM tools will …
- Have an easy to understand and use graphical interface,
- Will automate the employee scheduling process
- Will have built-in rules managers can use to track the number of hours (and overtime) in employee schedules, and
- Will automate activities such as employee shift swapping and more
In practice, a flexible, intuitive and automated scheduling module should enable managers to easily create employee schedules that avoid or diminish the amount of overtime being logged, reducing overall labor costs. Managers should also be able to generate labor forecasts, review daily and weekly labor plans, and make necessary adjustments. The tool should also leverage historical traffic and transactions data, so managers can align shifts with customer demand.
In 2016 employees making less than $50,444 may be eligible for overtime. Consequently, anything HCM tools can do to minimize the extra time managers spend on their jobs is important. Ideally, an HCM tool should be able to review available workers and automatically generate the most optimal employee schedule for any given day, week or month. An automated scheduler, while it may require some tweaking, is certain to save managers time and employers money.
Most importantly, the complete HCM tool should contain no interfaces. In more practical terms, the tool’s time and attendance capabilities should automatically update the tool’s payroll module whenever a change is made to an employee’s schedule. And this must be done in real time. Again, practically, this means managers can create a schedule forecasts that automatically update payrolls so they can see the full, labor cost impact of their proposed schedules.
Like Jim O’Connell, one of my favorite past-times is tracking FLSA changes and how they impact employers. However, I am equally interested in ways employers can practically address complicated regulatory requirements and – in the best of all worlds – not only survive, but thrive.
For a quick (15 minute) overview of Ceridian’s Dayforce HCM solution, please click here: Dayforce HCM Demo.
Howard Tarnoff is Senior Vice President for Ceridian HCM, responsible for launching and overseeing the Award Winning Customer Success Program “XOXO” and other initiatives. With over 30 years of HCM experience, Howard is a highly sought after thought leader in the industry, especially for his insightful trend analysis. His deep domain expertise across multiple verticals, leadership experience and deep understanding of the HCM industry make him an invaluable asset to Ceridian. Follow him on Twitter @htarnoff.