Fair Labor Standards Act New Payroll Rules for Summer Construction: Everything You Need to Know

Summer is upon us and so are new Fair Labor Standards Act (FLSA) salary thresholds. With it comes scorching temperatures for construction crews across the country. Payroll managers in the construction industry, especially those in the public sector, have a lot on their plate this season. Not only do they need to ensure workers are paid correctly for their overtime under harsh conditions, but they also need to navigate the recent changes to the Fair Labor Standards Act (FLSA) salary thresholds. This blog post will equip you with the knowledge to handle both challenges and keep your summer payroll running smoothly.

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Understanding the New FLSA Salary Thresholds

What Are the New Fair Labor Standards Act Salary Thresholds?

The FLSA sets minimum wage and overtime standards. One key provision is that certain salaried workers are exempt from overtime pay. However, to qualify for this exemption, employees must meet specific salary level tests. These thresholds were recently updated by the Department of Labor (DOL) and took effect on July 1, 2024.

Here’s the breakdown for the new Fair Labor Standards Act salary thresholds:

• Before July 1, 2024: The minimum salary level for an exemption was $684 per week, which translates to $35,568 annually.
• Effective July 1, 2024: The minimum salary level for an exemption jumps to $844 per week or $43,888 annually.
• Future Increases: The DOL will automatically adjust the salary thresholds every three years based on wage data.

These changes affect salaried workers in the construction industry, particularly in the public sector. The key points include:

• A raise in the standard salary level.
• An increase in the total annual compensation requirement for highly compensated employees.
• A mechanism for updating these earnings thresholds based on current data.

What this means for public sector employers:

Public sector employers are not exempt from FLSA regulations. Therefore, with the increased salary thresholds, some salaried workers in your construction crews who were previously exempt from overtime may now be eligible for overtime pay.

Here are some tips for ensuring Fair Labor Standards Act compliance:

• Review Job Classifications: Identify salaried workers in your construction crews and compare their salaries to the new FLSA salary thresholds.
• Update Payroll Systems: Adjust your payroll system to automatically calculate overtime for newly eligible employees.
• Communicate Changes: Inform your construction crews and supervisors about the changes to the FLSA salary thresholds and who may now be eligible for overtime pay.

Why Is Fair Labor Standards Act Compliance Important for Payroll Managers?

Payroll managers must ensure compliance with these new thresholds to avoid penalties. The construction industry often requires employees to work beyond standard hours, making it crucial to correctly calculate OT pay. Public sector employers need to be especially vigilant as they have stricter oversight and reporting requirements.

Key Considerations for Payroll Managers

1. Accurate Overtime Calculation Steps

• Identify Eligible Employees: Determine which salaried employees fall below the $55,000 threshold.
• Track Hours: Ensure accurate tracking of all working hours.
• Calculate OT Pay: Pay 1.5 times the regular hourly rate for hours worked beyond 40 in a week.

2. Compliance with the Fair Labor Standards Act Salary Thresholds and Rules

Regular Audits

Stay organized and conduct regular payroll audits to ensure compliance. Check that all eligible employees are receiving appropriate OT pay. This is especially important in the public sector, where non-compliance can lead to legal and financial repercussions.

Training and Updates

Keep your payroll team updated on the latest FLSA regulations. Regular training sessions can help ensure everyone understands and adheres to the new rules.

3. Overtime Calculations and Extreme Heat: Keeping Workers Safe and Paid Right

Health and Safety Considerations

Construction work is physically demanding, and summer heat adds another layer of stress with extreme heat. Ensuring workers are paid correctly for overtime becomes even more critical when they are battling extreme temperatures.

Here’s how to handle overtime pay for workers exposed to extreme heat:

• Track All Hours Worked: Carefully track all hours worked by your construction crews, including regular hours, overtime hours, and any breaks taken.
• Identify Overtime Triggers: Determine which employees qualify for overtime pay under the new FLSA salary thresholds.
• Calculate Overtime Pay Accurately: For non-exempt workers, calculate overtime pay at one and a half times their regular rate of pay for all hours worked over 40 in a workweek.

Additional Considerations for Heat Stress

• Heat Illness Prevention: Implement a heat illness prevention plan that includes hydration breaks, shade access, and monitoring for heat stress symptoms. (Here is a handy guide for Heat Illness Prevention.)
• Recordkeeping: Maintain records of heat-related work stoppages or adjustments to work schedules.
• State and Local Laws: Some states and localities may have additional regulations regarding heat stress and worker compensation. Be sure to check your local laws for any further requirements.

Practical Tips for Managing Summer Payroll

Tip 1: Use Mobile Time Tracking

Implement mobile time-tracking apps to ensure accurate time recording. This is especially useful in construction, where workers are often on-site and not near a traditional clock-in system like eBacon.

Tip 2: Communicate Clearly with Employees

Ensure employees understand the new FLSA salary thresholds and how it affects their pay. Clear communication helps prevent misunderstandings and disputes.

Tip 3: Implement a Heat-Response Plan

Develop a plan for handling extreme heat conditions. This should include guidelines for taking breaks, staying hydrated, and working in shaded areas. Ensure payroll reflects any adjustments due to heat-related work stoppages.

Tip 4: Regularly Review Payroll Policies

Review and update your payroll policies regularly to ensure they align with the latest FLSA regulations. This is particularly important in the dynamic construction industry.

Common Workforce Management Challenges and How to Overcome Them

Challenge 1: Keeping Up with Regulatory Changes

Solution: Subscribe to Updates –

Subscribe to industry newsletters and the U.S. Department of Labor email subscription service to receive FLSA updates. This ensures you stay informed about changes that could affect your payroll processes.

Challenge 2: Ensuring Accurate Time Tracking

Solution: Invest in Technology

Invest in reliable time-tracking technology like eBacon software. This minimizes errors and ensures accurate calculation of working hours and overtime pay.

Challenge 3: Managing Payroll for Large Teams

Solution: Delegate and Automate

Delegate payroll tasks to a team and use automation where possible. Automation tools can handle routine tasks, freeing up time for more complex issues.

Stay Compliant with the Fair Labor Standards Act

Staying compliant with the new FLSA salary thresholds is crucial for payroll managers in the construction industry, especially during the summer. By understanding the new rules, accurately calculating overtime, and handling the challenges of extreme heat, payroll managers can ensure they remain compliant and keep their workforce happy and healthy. Use the tips and strategies discussed in this post to navigate these changes smoothly and efficiently.

Final Thoughts on FLSA Salary Thresholds

Remember, the key to managing summer payroll effectively is staying informed and proactive. Regularly update your knowledge of FLSA regulations, invest in the right tools, and prioritize your employees’ well-being. By doing so, you can ensure compliance and create a positive working environment for your construction team.

Beat the heat this summer by staying on top of payroll considerations and ensuring you meet the new FLSA salary thresholds. Your employees will thank you, and your compliance will ensure smooth operations throughout the busy construction season.

FAQs: Summer Payroll and FLSA for Construction

The material presented here is educational in nature and is not intended to be, nor should be relied upon, as legal or financial advice. Please consult with an attorney or financial professional for advice.