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Final Overtime Rule and Steps within pay scales

John Andrew

Thu, May 30, 2024 3:43 PM

All,

Good morning from Lawton!

We have a question from our HR department regarding the new Final Overtime Rule by DOL. If we have two employees doing the exact same job description, but within their job is a step scale for raises, do we see any issues having some steps be hourly and some be salaried? He is afraid there could be some discrimination issues. I don’t know that I see it necessarily but can’t find anything on the subject and thought I’d ask here before I dig too deep.

Thanks!

John R. Andrew, J.D., M.P.A.
City Attorney

City of Lawton, Oklahoma
212 SW 9th Street
Lawton, Oklahoma 73501
Telephone: 580.581.3320
Facsimile: 580.581.3539
john.andrew@lawtonok.gov

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All, Good morning from Lawton! We have a question from our HR department regarding the new Final Overtime Rule by DOL. If we have two employees doing the exact same job description, but within their job is a step scale for raises, do we see any issues having some steps be hourly and some be salaried? He is afraid there could be some discrimination issues. I don’t know that I see it necessarily but can’t find anything on the subject and thought I’d ask here before I dig too deep. Thanks! John R. Andrew, J.D., M.P.A. City Attorney City of Lawton, Oklahoma 212 SW 9th Street Lawton, Oklahoma 73501 Telephone: 580.581.3320 Facsimile: 580.581.3539 john.andrew@lawtonok.gov Attorney-Client Communications / Attorney Work Product Confidential and Privileged This email message is protected by the attorney-client privilege, is confidential, and intended solely for the use of the above-named person. If you are not the person to whom this message is directed, or the person responsible for delivering it to the above-named person, you are advised that any dissemination, distribution or copying of this communication is prohibited. If you have received this message in error, please NOTIFY THE SENDER IMMEDIATELY by telephone, DELETE THIS MESSAGE FROM YOUR SYSTEM'S MEMORY AND RETURN ANY HARD COPIES OF THE ORIGINAL MESSAGE TO THE SENDER BY U.S. MAIL. Although this email and any attachments are believed to be free of any virus or other defect that might negatively affect any computer system into which it is received and opened, it is the responsibility of the recipient to ensure that it is virus free and no responsibility is accepted by the sender for any loss or damage arising in any way in the event that such a virus or defect exists.

Monica Coleman

Thu, May 30, 2024 4:46 PM

If you leave them in the same pay range, with the lower rates designated as non-exempt and the higher rates designated as exempt, you will want to keep track of the changes in the salary test that will be going into effect on July 1, 2024, and again on January 1, 2025. The salary threshold is increasing on July 1, 2024, to $43,888; it increases again on January 1, 2025, to $58,656.

Monica L. Coleman
General Counsel
Director of Personnel Services
mcoleman@omag.org mailto:mcoleman@omag.org
Oklahoma Municipal Assurance Group
3650 S. Boulevard
Edmond, OK 73013
Phone: (405) 657-1422
Fax: (405) 657-1401
OMAG Web Sitehttp://www.omag.org/
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From: John Andrew via Oama oama@lists.imla.org
Sent: Thursday, May 30, 2024 10:43 AM
To: oama@lists.imla.org
Subject: [Oama] Final Overtime Rule and Steps within pay scales

All,

Good morning from Lawton!

Thanks!

John R. Andrew, J.D., M.P.A.
City Attorney

City of Lawton, Oklahoma
212 SW 9th Street
Lawton, Oklahoma 73501
Telephone: 580.581.3320
Facsimile: 580.581.3539
john.andrew@lawtonok.gov mailto:john.andrew@lawtonok.gov

Attorney-Client Communications / Attorney Work Product

Confidential and Privileged

In order to be exempt from the overtime requirements of the FLSA, a classification must meet both the duties test and the salary test. If you have a classification that is performing work that meets the duties test and is paid according to a step plan at rates below what is required under the FLSA for being exempt, then the classification fails to meet the salary test. I would note that on the job description. But, it might be cleanest to separate the 2 so that you have a non-exempt classification and an exempt classification. If you separate them, then you will know to pay the non-exempt classification for all hours worked over 40 in a workweek (this includes overtime) and the exempt classification will receive their fixed salary. This will also be easier for your payroll folks to calculate. I don’t think there is any discrimination involved in paying the different rates. But, it is certainly easier to support the pay differences if the classifications are separated. If you leave them in the same pay range, with the lower rates designated as non-exempt and the higher rates designated as exempt, you will want to keep track of the changes in the salary test that will be going into effect on July 1, 2024, and again on January 1, 2025. The salary threshold is increasing on July 1, 2024, to $43,888; it increases again on January 1, 2025, to $58,656. Monica L. Coleman General Counsel Director of Personnel Services mcoleman@omag.org<mailto:mcoleman@omag.org> Oklahoma Municipal Assurance Group 3650 S. Boulevard Edmond, OK 73013 Phone: (405) 657-1422 Fax: (405) 657-1401 OMAG Web Site<http://www.omag.org/> Follow us on: [https://www.omag.org/portals/0/facebook_small.png]<https://www.facebook.com/pages/Oklahoma-Municipal-Assurance-Group/217733311740931?ref=stream> [https://www.omag.org/portals/0/twitter_small.png] <https://twitter.com/omag1977> [https://www.omag.org/portals/0/linkedin_small.png] <http://www.linkedin.com/company/oklahoma-municipal-assurance-group> NOTICE: The information contained in this email and any document attached hereto is intended only for the named recipient(s). If you are not the intended recipient, nor the employee or agent responsible for delivering this message in confidence to the intended recipient(s), you are hereby notified that you have received this transmittal in error, and any review, dissemination, distribution or copying of this transmittal or its attachments is strictly prohibited. If you have received this transmittal and/or attachments in error, please notify me immediately by reply e-mail and then delete this message, including any attachments. From: John Andrew via Oama <oama@lists.imla.org> Sent: Thursday, May 30, 2024 10:43 AM To: oama@lists.imla.org Subject: [Oama] Final Overtime Rule and Steps within pay scales All, Good morning from Lawton! We have a question from our HR department regarding the new Final Overtime Rule by DOL. If we have two employees doing the exact same job description, but within their job is a step scale for raises, do we see any issues having some steps be hourly and some be salaried? He is afraid there could be some discrimination issues. I don’t know that I see it necessarily but can’t find anything on the subject and thought I’d ask here before I dig too deep. Thanks! John R. Andrew, J.D., M.P.A. City Attorney City of Lawton, Oklahoma 212 SW 9th Street Lawton, Oklahoma 73501 Telephone: 580.581.3320 Facsimile: 580.581.3539 john.andrew@lawtonok.gov<mailto:john.andrew@lawtonok.gov> Attorney-Client Communications / Attorney Work Product Confidential and Privileged This email message is protected by the attorney-client privilege, is confidential, and intended solely for the use of the above-named person. If you are not the person to whom this message is directed, or the person responsible for delivering it to the above-named person, you are advised that any dissemination, distribution or copying of this communication is prohibited. If you have received this message in error, please NOTIFY THE SENDER IMMEDIATELY by telephone, DELETE THIS MESSAGE FROM YOUR SYSTEM'S MEMORY AND RETURN ANY HARD COPIES OF THE ORIGINAL MESSAGE TO THE SENDER BY U.S. MAIL. Although this email and any attachments are believed to be free of any virus or other defect that might negatively affect any computer system into which it is received and opened, it is the responsibility of the recipient to ensure that it is virus free and no responsibility is accepted by the sender for any loss or damage arising in any way in the event that such a virus or defect exists.