Considerations for Construction Industry Employers as They Continue to Prepare for New Salary Thresholds Under White-Collar Overtime Exemptions

By Amy L. Groff, K&L Gates, Harrisburg and Matthew D. Duncan, K&L Gates, Raleigh

Employers in the U.S. construction industry should act now to address recent changes to the overtime exemptions for “white-collar” employees. On May 18, 2016, the U.S. Department of Labor (DOL) published its highly anticipated final rule, which more than doubles the salary threshold required for certain executive, administrative, and professional employees to qualify for an exemption from overtime pay under the Fair Labor Standards Act (FLSA). The new rule will take effect on December 1, 2016. In this relatively short time frame, employers must review their current practices, determine which positions should be reclassified and how they should be classified and paid, consider related policies that should be revised, and plan how to communicate changes to employees.

These changes to the overtime exemptions will touch almost every employer in the country, but they are likely to have a disproportionate impact on construction-related businesses, which are among the industries projected to have the most affected workers. The final rule makes it much more difficult to treat employees such as first-line construction supervisors as exempt from overtime pay, and employers are now required to make hard staffing and economic choices in their businesses.

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