• Be paid a salary, meaning that they are paid a predetermined and fixed amount that is not subject to reduction because of variations in the quality or quantity of work performed (the “salary basis test”);
• Be paid at least a specified weekly salary level; and
• Primarily perform executive, administrative or professional duties, as provided in the DOL’s regulations (the “duties test”).

Highly compensated employees (HCEs) performing office or non-manual work and paid total annual compensation of a specified amount are exempt from the FLSA if they customarily and regularly perform at least one of the duties of an exempt executive, administrative or professional employee identified in the standard tests for exemption.

How does this impact you? Employers must review all employees paid on a salary basis to ensure they meet the salary requirements if they use the EAP salary exemption. If an employee does not meet the salary requirements, the employer can change the employee’s compensation to hourly or increase the salary to meet the salary requirements. Review the job duties tests referenced in the DOL Fact Sheet to determine whether or not an employee can be compensated hourly. (ADP, 6/14/2024)

ADP FLSA & Overtime Rule Guide. Updated 6/14/2024. https://sbshrs.adpinfo.com/flsa

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This exemption allows salaried employees to be paid a fixed amount for a workweek and, no matter the number of hours worked, not be eligible for overtime. The 2023 proposed rule directly impacts employees exempt from overtime based on the “executive, administrative, or professional” exemption.

The last update to the Fair Labor Standards Act (FLSA) overtime regulations was planned in 2016 when the minimum wage increase for salaried employees was proposed and blocked at the 11th hour from becoming a reality. The proposed increase would have taken the $455 weekly minimum to approximately $990. A few years later, without much fanfare, a smaller increase was proposed and implemented, making the weekly salary minimum $684 per week for exempt employees.

An employee must receive a minimum of $684 weekly (estimated 35,464 per year) to qualify for the exemption in most parts of the U.S. (29 CFR 541.600(a)). (New York State has set its thresholds). The new proposed rule would move the administrative exemption salary requirement to $1,059 per week or $55,068 per year.

What to do? Pull out your employee’s offer letters, job descriptions, and documents detailing their essential functions and responsibilities. Make sure your employees are classed correctly – non-exempt or exempt, and plan for an upcoming change for employees with exempt duties that do not meet the minimum salary requirement.

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1) Hiring is a science. Training is an art form.

If you peruse job listings on many websites, there are a few key phrases that are repeated over and over. Hiring managers are often looking for self-starters who need little to no supervision.   These are not necessarily bad things to look for in staff. Autonomous workers who take the initiative are the lifeblood of good business. That being said, those phrases can also mean that a business is looking for people that they do not have to train. While an employee handbook may seem small, it is a huge component in building a solid company culture. You want your people to know from the first day they come into your office what is expected of them. If everyone starts on the same page from the same place, your managers will have less work to do when explaining company policies and protections. This is imperative for new hires but can also be necessary for existing staff. If you hold regular meetings that review company structure and policy, you do a better job at ensuring that your people understand the rules of the job they are undertaking. This creates a structure but also a sense of camaraderie that cannot be undervalued.

2) Hire for job fit first, culture fit second.

Every good human resources professional knows that if you leave hiring solely up to the CEO, you will end up with a staff that is almost unilaterally the same. Having staff that is like-minded and interested in the longevity of your company is a good thing. It can be, but CEOs are also in charge of setting the tone for the entire company. This means that diversity is often the mother of creativity. It is up to cooperation between your hiring managers and your human resources people to find the people who fit the position first and potentially your culture second. Why? Because the more you diversify your company culture from the top down, the more your people will be open to new ideas and innovations. This circles back to the idea of training that includes strong mission statements and company values. Even if a new hire is slightly different from your current team, if you set clear company policies, you garner the expectation that everyone will be operating under the same set of rules. This way, you diversify within an existing structure and innovate within a given set of rules.

3) Listen to your people.

One of the biggest reasons why an employee may leave a job is that they feel undervalued and that their voice is not heard. Of course, every company has a squeaky wheel employee who never seems satisfied with anything; we agree that there are more effective ways to deal with those types of people. Those specific people should not deter you from keeping a listening ear open for your employees who do good work consistently. Train your management to keep their doors open to your people so that your employees feel like their ideas and contributions are valued within the company structure.

4) Good company culture starts from the top down.

If your CEOs and upper-level managers are not willing to play by the company’s policies, your managers will be less likely to do so as well. This all trickles down to the lowest-level employees. The most important people in the company have to be willing to embody the mission and concept of the company as a whole. If your top people are open, honest, and willing to play by the rules, they will set the standard for the rest of your staff to behave the same way. The old parenting trick of, “Do what I say, not what I do,” does not go very far when building successful company culture.

5) Value HR. Even when it is not your friend.

The job of Human Resources is to take care of your people, from payroll to compliance. If your human resources department is weak or non-existent, you leave your employees without proper channels to express concerns or feelings of discomfort within the workplace. There is also a certain level of security that comes with knowing who writes your paycheck, where you stand with PTO and benefits, etc. Your human resources department is also responsible for writing and administering an employee handbook. Make your HR department a key player in your company’s operations.

At Idilus, we know that employees and employers live in a delicate balance of needing each other. Let us help you find the perfect mission statement and voice for your company to lay the framework for a strong company culture today.

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