Closing the Books on 2016: Ending the Year Right for Employers | Practical Law

Closing the Books on 2016: Ending the Year Right for Employers | Practical Law

Guidance for employers about laws, policies, and procedures they should be aware of at year-end regarding employee performance and compensation.

Closing the Books on 2016: Ending the Year Right for Employers

Practical Law Legal Update w-005-0417 (Approx. 5 pages)

Closing the Books on 2016: Ending the Year Right for Employers

by Practical Law Labor & Employment
Published on 19 Dec 2016USA (National/Federal)
Guidance for employers about laws, policies, and procedures they should be aware of at year-end regarding employee performance and compensation.
December is a time when many employees are occupied with holiday parties, vacations, and New Year's plans. Amid the sometimes distracting festivities, employers must remain focused on important year-end decisions and actions regarding their employees. For example, employers often must:
  • Conduct annual performance reviews.
  • Make compensation decisions about:
    • salary increases;
    • bonus awards and calculations;
    • earned commission payments; and
    • commission plans and goals for 2017.
  • In some jurisdictions, carry over or properly compensate employees for unused:
    • vacation time;
    • earned sick leave; or
    • other paid time off (PTO).
  • Adjust pay to account for minimum wage hikes.
Employers must also deal with the uncertain fate of the DOL Final Rule that nearly doubles the minimum salary needed to qualify for most white collar exemptions under the FLSA (see Legal Update, DOL's Final Rule Doubles Minimum Salary Required for White Collar Exemptions Under the FLSA). The Final Rule was scheduled to become effective on December 1, 2016, but a federal district court in Texas issued a nationwide injunction against the implementation and enforcement of the Final Rule on November 22, 2016 (see Legal Update, DOL's Final Rule Increasing Minimum Salary for FLSA Exemption Enjoined Nationwide: ED Texas). The DOL has appealed the ruling to the US Court of Appeals for the Fifth Circuit, but despite an expedited briefing schedule, the appeal will not be resolved before employers close their books on 2016.
Practical Law has published many resources to help employers manage items on their list at this busy time of year. Practical Law also has many resources to help employers with reclassification issues if and when the new overtime regulations become effective in 2017. These resources include: