Overtime pay. Employees love it, but it can wreak havoc with your budget.
The Department of Labor (DOL), using the Fair Labor Standards Act (FLSA), has been deliberating about whether to extend the eligibility for overtime pay to more employees. The standard rate for overtime has traditionally been time-and-a-half for full-time employees who are eligible. This practice, of course, greatly increases labor costs and affects profit margins.
According to a recent Wall Street Journal article: “Overtime Rules Send Bosses Scrambling” posted by Rachel Feintzeig, Rachel Emma Silverman, and Lauren Weber, approximately $6.7 trillion in wages were paid to workers in 2013 and, if the proposed overtime rule goes into effect as it is proposed, nearly $1.5 billion could be paid to workers by employers during the first year of implementation in addition to $593 million in administrative costs. The proposed plan issued by the Labor Department would more than double the salary threshold that determines which workers are eligible for time-and-a-half pay when working over forty hours a week. This could eventually affect millions more workers.
It isn’t too early to deploy the solutions that can manage these changes and protect your bottom line.
Businesses are scrambling to deploy technology to track employee information in order to keep costs in check as well as to remain compliant with legislation. Organizations may need to decide which of their employees should be offered salaries as opposed to hourly pay and what efforts could be made in the area of reevaluating tasks in order to discourage working overtime.
Those organizations that use Enterprise Resource Planning (ERP) solutions such Microsoft Dynamics GP already have the technology needed to track and calculated work time for individual employees. Combine Microsoft Dynamics GP Payroll with Integrity Data’s Overtime Hours Rules, our innovative add-on solution, and you can easily manage the hour calculations needed for DOL and FLSA compliance.
You can use Overtime Hours Rules to configure overtime rules to accommodate specific requirements for the employee, position, department, or other variables. You can calculate overtime hours by day, week, pay period, or a combination of all three categories, and set the priority order for which pay transactions are subject to overtime. Minimize your risk for penalties from the DOL and legal challenges from employees by ensuring that you are staying in compliance with the Fair Labor Standards Act’s requirements.
Don’t let the proposed rules run up payroll, get ready for the changes today. Contact Dan Doolin of Integrity Data for more information about using Overtime Hours Rules or other payroll solutions to control runaway payroll costs.
By Integrity Data, a Microsoft Dynamics GP ISV out of Illinois