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Navigating FLSA Changes: Proactive Measures and Misclassification Consequences

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The Fair Labor Standards Act (FLSA) is undergoing significant changes, impacting both employers and employees. As an HR consulting firm, C34 HR Consulting recognizes the importance of staying informed and proactive. This article explores recent FLSA updates, the significance of proper classification, and how our services empower businesses.

Effective July 1, 2024, the U.S. Department of Labor (DOL) implemented a new overtime regulation. The key points of this regulation include a

  • Salary threshold increase: which raises the standard salary level defining which salaried workers are entitled to overtime pay protections under the FLSA.

  • Salaried workers earning less than $844 per week (annualized to $43,888) will become eligible for overtime pay, starting July 1, 2024.

  • The threshold increases further to $1,128 per week on January 1, 2025.

  • The threshold will be revisited and calculated every three years.

Proper classification of employees as exempt or non-exempt is crucial, as exempt employees are not entitled to overtime pay, while non-exempt employees are. The most litigated exemptions fall under the “white-collar” categories, which include:

  • Executive: Primary duties in leadership.

  • Administrative: Primary duties are directly related to office non-manual work, that is directly related to management or business operations

  • Professional: There are two categories of professional the Learned and the creative. Learned professional: Advance knowledge predominantly intellectual work in the field of science or learning. Creative professional: Primary duty must involve a creative pursuit such as invention or the application of their imagination to achieve within their role.

Employers must analyze job duties to determine exemption status, requiring a fact-intensive analysis in each case. Employers bear the burden of proving correct exemption classification. In 2020 a computer company in Texas paid hefty fines and damages for misclassifying employees, let’s take a quick look at this case.

A notable case illustrating the importance of proper classification is Novick v. Shipcom Wireless, Inc., where improper classification led to litigation. Four plaintiffs challenged their exempt status, claiming they were owed overtime pay. An internal audit by Shipcom revealed misclassification, resulting in backpay for affected employees. The consequences of misclassification include double back pay, legal costs, and reputation risk. Employees may receive unpaid overtime and liquidated damages, FLSA lawsuits can be expensive, especially collective actions, and misclassification damages trust and reputation.

C34 HR Consulting compliance experts adopts a comprehensive approach to help businesses navigate these challenges. We focus on education and communication, ensuring clients understand FLSA changes and the importance of proactive measures. Clear communication helps clients comprehend their obligations and risks. We also offer customized training programs covering FLSA compliance, enabling leaders to recognize exemption criteria and avoid misclassification pitfalls. Our thorough audits, conducted with legal guidance, ensure compliance and minimize discoverable evidence risks. Additionally, we provide tailored solutions to fit each client’s unique workforce, helping businesses navigate FLSA complexities confidently.

Staying ahead of FLSA changes is essential. C34 HR Consulting partners with businesses, providing expertise, training, and proactive solutions. Let us help you navigate the evolving landscape and protect your organization. For more information, contact us at or 316-844-0567. Don’t let your business be the next ShipCom!

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