Coming federal regulations will change "white-collar exemptions" by increasing the maximum amount of salary workers need to earn before being considered exempt. Here's what hospitals need to know.
Ready or not, the overtime regulations proposed by the US Department of Labor are coming. Out for public comment through September 4, the new regs are on-track to be implemented during the second quarter of next year.
Now is the time for healthcare organizations to start making preparations for these new laws around payment, says Jonathan Kozak, employment litigator with the workplace law firm Jackson Lewis in White Plains, NY. "There is no reason to believe this won't take effect as planned," he says.
First published on July 6, the proposed regulations will change "white collar exemptions" by increasing the maximum amount of salary workers need to earn before being considered exempt to $50,440 annually.
I wrote about the proposed regulations last month after speaking with Kozak. Here's more of our conversation, edited for clarity and brevity:
HealthLeaders Media: Hospitals typically employ many service workers—cafeteria staff, gift shop managers, and so on. How does this affect them?
Jonathan Kozak: Most of these workers already earn under $455 weekly and are hourly employees, so I don't see the new regulations impacting those positions very much. The people this will more likely impact are those in management positions in those departments: For example, cafeteria and gift shop managers.
They may currently be considered exempt executives and ineligible for overtime, but going forward, if they earn less than $50,000 annually, they will be overtime pay-eligible. If they're not exceeding the new salary minimum, they won't be exempt, regardless as to their job responsibilities.
HLM: Should Healthcare HR consider this a good time to reevaluate which jobs within their organization are exempt and which are non-exempt?
Kozak: The fact that the regulations are changing should be an impetus to review which positions are considered exempt and nonexempt. There's likely plenty of positons in a grey area or on the borderline that are considered exempt where the change in the salary basis amount is going to make it crystal-clear that the position is nonexempt. But there are probably other positions that aren't quite so clear and will need to be closely evaluated.