The Department of Labor is proposing to increase the exempt salary threshold for certain white-collar exemptions, potentially raising it from about $35,000 to about $55,000 annually. Clubs are advised to review pay practices and prepare for compliance.

An impending change in overtime pay regulations could affect many clubs and their employees. The Department of Labor (DOL) is proposing to increase the exempt salary threshold for certain white-collar exemptions, potentially raising it from about $35,000 to about $55,000 annually. This change is expected to impact around 3.6 million workers.

The following is an eight-step action plan for clubs to prepare for the potential implementation of this rule:

– Review Pay Practices and Prepare for Compliance: Understand the proposed changes and how they may affect your club’s budget and payroll practices.

– Work Through Your Decision Tree: Assess which employees fall within the salary range that could be affected and decide whether to raise their salaries to meet the new threshold or convert them to non-exempt status.

– Consider the Impact on Employee Morale: Recognize that reclassifying employees to non-exempt status may have negative implications for morale, as some employees may perceive it as a demotion.

– Plan to Provide Advance Notice of Changes: Develop clear communication strategies to inform employees about any changes to their compensation and responsibilities.

– Review Your Policies on Club Equipment and Personal Devices: Assess whether current policies regarding the use of club equipment and personal devices need to be adjusted for employees transitioning to non-exempt status.

– Develop a Training Plan for Managers and Newly Non-Exempt Employees: Implement training programs to educate both employees and club managers about new policies, procedures, and regulations related to non-exempt status.

– Ensure Exempt Employees Meet the Duties Test: Apart from the salary threshold, ensure that exempt employees also meet the duties requirements for their positions.

– Review Applicable State Laws: Understand that state laws regarding overtime pay may differ from federal regulations, so it’s essential to review and comply with relevant state laws as well.

Clubs should stay updated on developments from the DOL and seek legal counsel for further guidance on compliance with the proposed changes.