The U.S. Labor Department (DOL) recently proposed changes to the overtime hours rules under the Fair Labor Standards Act (FLSA) which are expected to be implemented in July. The proposed changes could significantly impact small businesses, especially those that may need to update compensation plans in order to remain compliant. Here are tips for small businesses to consider before the proposed overtime rules soon take effect.

As discussed in the article, “New Overtime Rules Loom for Small Businesses,” posted by Tara Wolckenhauer on, the proposed overtime rules could extend overtime eligibility to nearly 5 million currently exempt workers. The new rules increase exemptions from the current minimum of $455 per week or $23,660 a year to the 40th percentile of earnings for full-time salaried workers. The DOL expects this could equate to nearly $970 per week or $50,440 annually, a rather large change from current standards.

Follow These Tips for Minimizing Costs and Remaining CompliantDepositphotos_31782187_s-2015

Small business owners and leaders shouldn’t wait any longer to determine how the proposed rules could impact their bottom lines or what to do once the laws take effect. Putting a plan in place now will make it easier to remain compliant once the rules become effective. Start here:

  1. Review employee classifications: The overtime rules are broken down into exempt and nonexempt employees and employers need to consider current compensation structures, as well as the specific tasks performed by employees as described in the regulation.
  2. Manage employee hours: Detailed timesheets and tracking time and attendance has never been more important. A robust payroll solution, such as Overtime Hours Rules, can streamline management of employee hours in Microsoft Dynamics® GP Payroll. You can establish overtime hours rules that comply specifically with FLSA and state requirements, as well as other corporate policies. Automating the calculation of overtime hours can save time and provide the insight needed to minimize the impact of the new FLSA rules.
  3. Reconsider pay structures: Converting to hourly pay and limiting overtime or paying employees more could keep costs down in certain situations. Increasing salaries, for example, to meet the overtime threshold could save money in the long run.

Deploy the technology that can support management of the pending overtime rules. Contact us for more information about Overtime Hours Rules and other enhancements that can streamline the GP payroll process.