By Jay Salem, Human Capital Leader, GSI Executive Search
The Department of Labor’s new overtime law, passed on September 24, 2019, raises salary cutoff from $23,660 annualized to $35,568 annualized, or $684 per week. This means to be an exempt employee from overtime under the Federal Labor Standards Act (FLSA), an employee must be paid a salary of at least the threshold amount of $35,568 annualized and also meet certain duties tests. If employees are paid less or do not meet the specific duties test, they must be paid 1.5 times the regular hourly rate worked for time worked in excess of 40 hours per week.
It is estimated that 1.3 million currently exempt workers will have to be reclassified to the non-exempt classification or given a pay raise to get them to the exempt classification if they truly are exempt per the duties test.
Complying with federal labor laws can be a complicated and a tedious process. However, failure to do so can be very expensive if your private club or hospitality organization is audited either randomly by the Department of Labor or by a complaint from an employee. Either of these situations will generate an audit by the Department of Labor.
To avoid significant financial loss from an audit, your employee records must be correct. To compile and maintain correct records, many factors must be considered, including job descriptions, duties tests, pay scales, time keeping systems (manual or automated) and compliance by supervisors and employees. All employees must be coded either exempt or non-exempt in their employee records.
The professionals at GSI Executive Search are available to provide a comprehensive audit of your employee records. If you have questions or would like a free phone consultation, please call me – Jay Salem, Human Capital Leader – at 214-533-5165 or email jsalem@gsiexecutivesearch.com. Thank you for your attention to this very important matter.
Jay Salem brings over 40 years of senior management experience to GSI Executive Search. Currently, he serves a dual role as Chief Operating Officer of GSI Executive Search, as well as Principal and Director of the Human Capital Practice for its parent company, Ethos Club & Leisure LLC. In this capacity he provides HR administration and compliance services to the private club and real estate development community.
