Twenty percent of large companies believe they will miss the August 23 deadline
for bringing their companies into compliance with new regulations governing
overtime eligibility, according to a study by Hewitt Associates.
Hewitt surveyed more than 150 major companies and found that another 23 percent
said they will meet the required date, but only with additional resources allocated
to the effort. Among those that need more time, the median is an additional
80 days beyond the deadline.
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In April, the U.S. Department of Labor (DOL) published new regulations redefining
the "white-collar" exemption tests used to determine whether an employee
must be paid overtime. The new rules will be enforced beginning August 23.
The most significant issues in complying with FLSA legislation involve categorizing
current jobs and interpreting new FLSA rules, according to the study. Specifically,
26 percent of companies said their biggest challenge is that existing job documentation
is old, incorrect, or inconsistent. Another 24 percent said their primary issue
involves understanding the new rules.
"Many companies have a considerable road in front of them, as they need
to sort through existing job titles and codes before they can determine what
needs to be done with the new FLSA regulations," says Tom Farmer, senior
consultant for Hewitt Associates. "Organizations have to ensure that they
properly classify positions by employees, examine variations in job duties by
department and clarify overly generic job titles. This is a daunting task, especially
as we pass the halfway mark to comply."
Hewitt's study also found that most companies have yet to determine the financial
impact of the FLSA changes and have yet to communicate the impact of the changes
throughout their organizations.
- From the HR.BLR.com Library: