It’s July!
What does that imply?
The new federal guidelines for exempt staff have began taking impact. We’re right here to assist with the commonest questions the AADOM group has despatched us on this matter!
Should you pay anybody a wage that’s lower than $58,656, this text is for you!
Bear in mind, any time you may have an HR challenge that both stumps you or need a completely different perspective on the best way to resolve it, submit it right here for us HR nerds right here at CEDR that can assist you every month throughout HR Tuesday.
This month, the questions submitted closely targeted on the brand new federal guidelines for exempt staff, so we determined to focus our article on that.
Right here’s a Fast Overview
First issues first, let’s make clear what we’re speaking about with this exempt and wage enterprise.
When it comes all the way down to it, you’ll be able to set a pay construction virtually nevertheless you need. Some companies pay everybody on a salaried foundation, some pay everybody hourly, and plenty of have a mixture of pay strategies primarily based on particular person positions.
What’s necessary?
Realizing whether or not the particular person you’re paying is exempt or non-exempt from the federal Honest Labor Requirements Act (FLSA).
Most staff are non-exempt, that means all of the FLSA guidelines apply. Which means you have to have data of their hours labored and pay additional time in the event that they go over 40 hours in a workweek. That is the case irrespective of the way you pay the particular person. You’ll be able to put a non-exempt worker on wage, however you continue to have to have them clock out and in, and you continue to must pay additional time.
Merely put, wage alone doesn’t change your authorized obligations beneath the FLSA.
You’ll be able to solely cease having the particular person clock and cease paying additional time if the worker qualifies to be exempt from the FLSA.
In a dental workplace, this usually means they’re a high-level supervisor or a physician. We’re placing physician compensation apart this month, as medical doctors get an additional particular exception to the rule that permits you to pay them utilizing strategies like percentages of manufacturing or collections.
For managers, you may have just one possibility if you need them to be exempt – they must be paid on a salaried foundation. And, that wage needs to be a minimum of the minimal charge set by the federal Division of Labor (DOL).
The wage charge simply acquired up to date for the primary time in a few years, so right here’s the brand new rule:
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- Earlier than July 1, 2024: $684 per week (equal to $35,568 per 12 months)
- July 1, 2024: $844 per week (equal to $43,888 per 12 months)
- January 1, 2025: $1,128 per week (equal to $58,656 per 12 months)
Which means for those who or any of your staff are being paid as an exempt salaried supervisor, you have to be sure that the wage quantities are at or above these minimums by the required dates.
Many staff throughout the nation who’re at present paid as exempt staff are going to be experiencing the shift to hourly pay. This may increasingly embrace many workplace managers in dental places of work.
Paying somebody as in the event that they’re exempt after they don’t make a excessive sufficient wage or don’t meet the job responsibility necessities to be an exempt worker means they’re legally misclassified within the eyes of the DOL. One audit or worker criticism and you would be on the hook for hundreds of {dollars}. Take a look at this episode of What the Hell Simply Occurred?! for extra on what can occur for those who classify staff incorrectly.
Now, let’s get to your questions on how this all works:
Query: I’m our workplace supervisor and I’m at present paid $50,000. I feel I ought to get a increase primarily based on the brand new guidelines, however my physician is saying she’s going to make me hourly as a substitute. Who is correct?
The excellent news is that you just make sufficient to fulfill the brand new July 1, 2024, exempt threshold, so you may have till the tip of the 12 months to determine the best way to strategy this.
One of the best ways to deal with this may rely upon a number of elements, so neither of you is essentially “proper” right here.
In making the choice on what to do, each you and the physician have to consider the common variety of hours you’re employed per week. If you’re non-exempt, you’ll be eligible for additional time pay that you weren’t beforehand receiving. You’ll must be monitoring your entire time spent working, which can embrace after-hours and weekend staffing and affected person wants.
A “draw back” of being exempt is that you just don’t get any further pay for the additional hours you place in. Because of this many people completely choose to be non-exempt in order that they by no means really feel shorted and so they can get additional time pay.
In most true exempt positions, nevertheless, issues ought to steadiness out so that you just’re seeing the advantages of the larger flexibility in being exempt.
However which means that you shouldn’t assume being switched to hourly is much less advantageous. The take-home pay as a non-exempt worker might really be greater than anticipated. It’s a good suggestion to do a tough audit of what number of hours you usually put in every week.
Calculate what your pay can be primarily based in your wage’s equal hourly charge. If this places you above or near the brand new wage threshold quantity, the higher enterprise choice could, in truth, be to present you a increase and maintain you exempt.
If you’re nonetheless considerably under the quantity, nevertheless, the physician could have to make the enterprise choice to transform you to non-exempt standing. What you are able to do is discuss expectations for after-hours tasks as a non-exempt worker and set objectives for getting again to exempt standing.
After all, when you begin taking a look at counting up your individual hours you might be eyeing that additional time alternative! We depart that debate and choice to you and the enterprise proprietor!
Query: My physician is saying she’s going to place our workforce leads on hourly as a substitute of wage as a result of they’re not allowed to be on wage anymore. Is {that a} demotion?
Being a salaried worker can carry a number of standing with it in lots of peoples’ minds, so it’s comprehensible that being modified from wage to hourly can really feel like a slight to an worker.
You probably have a workforce lead who seems like they’re being demoted, take a while to clarify to them why the change is going on. Reaffirm to them that their place in your workforce is just not altering and that you’re solely having to make an adjustment attributable to authorized necessities.
Remind them that nobody on their workforce will even know that their pay construction has modified, so their relationship with their workforce is not going to be impacted. They preserve the identical tasks and place as a member of administration.
If wage is admittedly necessary to somebody, you’ll be able to at all times take into account paying them a wage as a non-exempt worker. Nonetheless, this will get sophisticated since you nonetheless owe them additional time in the event that they work over 40 hours per week.
Folks are likely to not do nearly as good of a job clocking out and in after they suppose it’s not as necessary since they’re on wage. In addition they don’t like their wage being adjusted after they miss a number of work, despite the fact that you’ll be able to make these forms of changes when the salaried worker is non-exempt.
Should you’re contemplating making anybody a salaried non-exempt worker, we extremely suggest speaking to a CEDR advisor first to ensure you perceive what you’ll be able to and may’t do, and that it’s documented clearly for the worker.
Query: How do I regulate my hygienist’s pay? They’re exempt and paid on a day by day charge.
Exempt and day by day charge pay don’t combine until it’s a physician.
The principles listed below are fairly absolute. Salaried means salaried. It needs to be a hard and fast quantity per week. A set quantity per day doesn’t minimize it beneath federal guidelines. Nor does paying primarily based on any kind of fee.
It needs to be a flat wage or there merely is not any manner for the hygienist to be exempt.
To keep away from additional time, your hygienist would must be paid on a salaried foundation and meet further exempt necessities.
You probably have been paying a hygienist as in the event that they had been an exempt worker, now could be the time to audit their pay historical past to substantiate that they’ve at all times been paid:
- For all hours labored (even time between sufferers, and time in conferences!).
- A minimum of minimal wage for all of that point.
- They had been paid additional time in the event that they labored over 40 hours in per week (or over 8 hours a day in some states like Alaska and California).
Sadly, in the event that they had been paid a day by day charge, they could not have been requested to clock their time, so that you’ll must make your finest estimates primarily based on this information.
The simplest factor to do is to alter them to hourly pay as quickly as attainable to keep away from any legal responsibility for the misclassification. If you need them to be exempt as a substitute, you not solely have to get them on wage but in addition see in the event that they qualify beneath the manager or administrative exemptions—which normally is just not the case for a hygienist until they’re the workforce lead and maintain supervisory authority.
Oh, and your hygienist can be not a contractor.
Take our complimentary course on the subject right here, which covers the DOL guidelines concerning classifying your staff accurately!
HAVE A QUESTION FOR CEDR? Submit your HR questions for CEDR to debate on the following HR Tuesday LiveCast right here!
