According to the Department of Labor, employers will spend an estimated $592.7 million to comply with the new rule and it will cost $254.5 million for businesses to become familiar with the regulation; then another $160.1 million to make necessary adjustments; and $178.1 million in managerial costs.
The new rule will:
The final rule will become effective on December 1, 2016, giving employers six months to prepare. The final rule does not make any changes to the duties test for executive, administrative and professional employees.
There are many factors to consider other than just the monetary ones. As a business, you will have to deal with the impact of the reclassification of employees. There are many issues that can have an adverse impact if not handled quickly. A few things to consider include:
We recommend to our customers that they take the necessary steps immediately to ensure their employees are properly classified and paid correctly, and that applies to you as well. Planning for these changes is important to the success of a smooth transition.