Answers to Frequently Asked Questions on the DOL Proposed Overtime Rule
September 23, 2023
Answers to Frequently Asked Questions on the DOL Proposed Overtime Rule

On Aug. 30, 2023, the U.S. Department of Labor (DOL) announced a proposed rule to amend current requirements employees in white collar occupations must satisfy to qualify for an overtime exemption under the Fair Labor Standards Act (FLSA).


The FLSA white collar exemptions apply to individuals in executive, administrative, professional, and some outside sales and computer-related occupations. Some highly compensated employees may also qualify for the FLSA white collar overtime exemption.


To qualify for this exemption, white collar employees must satisfy the standard salary level test, among other criteria. This salary level is a wage threshold that white collar employees must receive to qualify for the exemption.


The DOL is proposing to increase the standard salary level from:

  • $684 to $1,059 per week ($55,068 per year); and
  • $107,432 to $143,988 per year for highly compensated employees.


Action Steps

The proposal does not impose any new requirements on employers at this time. However, employers should become familiar with the proposed rule and evaluate what changes they may need to adopt if the rule is implemented as proposed.


OVERVIEW

1. What is the purpose of the Department’s proposed rule?

This rulemaking proposes to update and revise the regulations for determining whether certain white-collar salaried employees are exempt from minimum wage and overtime requirements under section 13(a)(1) of the Fair Labor Standards Act (FLSA). Employees are exempt if they are employed in a bona fide executive, administrative, or professional (EAP) capacity as those terms are defined in the Department of Labor’s regulations at 29 CFR part 541. This exemption from the FLSA is sometimes referred to as the “white-collar” or “EAP” exemption.


2. What is “overtime?”

Unless specifically exempted, an employee covered by the FLSA must receive pay for hours worked in excess of 40 in a workweek at a rate not less than one and one-half their regular rate of pay. This is referred to as “overtime” pay.


3. What determines if an employee falls within the EAP exemption? 

Currently, to fall within the EAP exemption, an employee generally must: 


  1. Be paid a salary, meaning that they are paid a predetermined and fixed amount that is not subject to reduction because of variations in the quality or quantity of work performed (the “salary basis test”);
  2. Be paid at least a specified weekly salary level, which is $684 per week (the equivalent of $35,568 annually for a full-year employee) in the current regulations (the “salary level test”); and
  3. Primarily perform executive, administrative, or professional duties, as provided in the department’s regulations (the “duties test”). 


Certain employees are not subject to either the salary basis or salary level tests (for example, doctors, teachers, and lawyers).


4. When did the Department last revise the exemption regulations for EAP workers?

The Department last updated the EAP exemption regulations in 2019. That update, which included setting the standard salary level test at its current amount of $684 per week (equivalent to a $35,568 annual salary), has been in effect since January 1, 2020.


5. Why is the Department proposing to revise the exemption regulations for EAP workers?

The Department is committed to keeping the earnings thresholds up to date for the benefit of both workers and employers. Four years have passed since the 2019 rule, during which time salaried workers in the U.S. economy have experienced a rapid growth in their nominal wages, which lessens the effectiveness of the current salary level threshold. Through this rulemaking, the Department seeks to update the salary level test to more effectively identify who is employed in a bona fide executive, administrative, or professional capacity and ensure that the FLSA’s intended overtime protections are fully implemented.


In addition to updating the salary level to account for increased wages, the Department’s proposal would ensure that the salary level effectively performs its historic function of screening nonexempt employees from the overtime exemption and would more effectively account for the switch from a two-test to a one-test system.


6. What is the Department proposing to change about its exemption regulations for EAP workers?

In this rulemaking, the Department proposes to:


  • Increase the standard salary level to the 35th percentile of earnings of full-time salaried workers in the lowest-wage Census Region (currently the South), which would be $1,059 per week ($55,068 annually) based on current data;
  • Apply the standard salary level to Puerto Rico, Guam, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands, and increase the special salary levels for American Samoa and the motion picture industry; 
  • Increase the highly compensated employee (HCE) total annual compensation requirement to the annualized weekly earnings of the 85th percentile of full-time salaried workers nationally, which would be $143,988 per year based on current data; and
  • Automatically update these earnings thresholds every 3 years with current wage data to maintain their effectiveness.


7. Is the Department proposing any changes to the current duties test?

The Department is not proposing changes to the standard duties test, consistent with its approach in both the 2016 and 2019 rules. At this time, the Department favors keeping the current standard duties test, which is well known to employers and employees. As long as it is paired with an appropriate salary level requirement, the standard duties test can appropriately distinguish bona fide EAP employees from nonexempt workers. 


8. Where can I review, and how can I comment on, the Department’s proposed changes to the exemption regulations for EAP workers?

The Department's Notice for Proposed Rulemaking (“NPRM”) is available at www.regulations.gov. The Department encourages all interested parties to participate in the rulemaking process by submitting written comments regarding the NPRM within 60 days from the publication date in the Federal Register. 


FLSA Basics

9. What does the FLSA do?

The FLSA establishes minimum wage, overtime pay, recordkeeping, and youth employment standards for employees in the private sector and in federal, state, and local governments. Covered nonexempt workers are entitled to a federal minimum wage of not less than $7.25 per hour. Overtime pay at a rate not less than one and one-half times the regular rate of pay is required after 40 hours of work in a workweek.


10. Who is covered by the FLSA?

Generally, employees of enterprises that have an annual gross volume of sales made or business done of $500,000 or more are covered by the FLSA. In addition, employees of certain businesses are covered by the FLSA regardless of the amount of gross volume of sales or business done. These businesses include hospitals; establishments providing medical or nursing care for residents; schools (whether operated for profit or not for profit); and public agencies. Employees of employers that are not covered by the FLSA on an enterprise basis may still be entitled to its protections if they are individually engaged in interstate commerce.


11. Does the FLSA and the Department’s proposed rule apply to state or local government workers?

Yes, state and local government employers are subject to the FLSA and the Department’s proposed regulations concerning EAP employees.


12. Is there a small business exemption from the FLSA or the Department’s proposed rule for EAP workers?

The FLSA does not provide an exemption for small businesses. Generally, the FLSA and the proposed rule apply to employees of enterprises that have an annual gross volume of sales made or business done of $500,000 or more, and certain other businesses. The FLSA creates a level playing field for businesses by setting a floor below which employers may not pay their employees.


13. Is there an exemption for nonprofit organizations from the FLSA or the Department’s proposed rule?

There is no exemption for nonprofit organizations under the FLSA or in the proposed rule. Thus, the proposed rule may impact nonprofit organizations that have an annual dollar volume of sales or business done of at least $500,000. In determining coverage, only activities performed for a business purpose are considered. Charitable, religious, educational, or similar activities of organizations operated on a nonprofit basis where such activities are not in substantial competition with other businesses are not considered. Employees of employers that are not covered by the FLSA on an enterprise basis may still be entitled to its protections if they are individually engaged in interstate commerce.


14. How is overtime pay determined?

Unless exempt, an employee covered by the FLSA must receive overtime pay for all hours worked over 40 in a workweek at a rate not less than one and one-half times their regular rate of pay. For guidance in determining an employee’s “regular rate of pay” when calculating overtime pay, refer to WHD Fact Sheet #56A or the Department’s regulations at 29 CFR part 778.


15. What is the FLSA’s EAP exemption?

Section 13(a)(1) of the FLSA exempts individuals employed in a “bona fide executive, administrative, or professional capacity” from the Act’s minimum wage and overtime requirements. Certain computer professionals and outside sales employees are included in the exemption and therefore excluded from the minimum wage and overtime requirements. The FLSA instructs the Department to issue regulations that define and delimit the EAP exemption; those regulations are located at 29 CFR part 541.


16. I'm paid a salary and my job title is manager. Am I exempt from overtime pay?

Job titles do not determine exempt status, and the fact that a white-collar employee is paid on a salary basis is not alone sufficient to exempt that employee from the FLSA’s minimum wage and overtime requirements. For an exemption to apply, an employee’s specific job duties and salary must meet all of the applicable requirements provided in the Department’s regulations.


17. What if a state has its own laws about who is entitled to overtime pay?

The FLSA provides minimum standards and does not preempt a state from establishing more protective standards. If a state establishes a more protective standard than the provisions of the FLSA, the higher standard applies in that state. This would include, for example, exemption criteria for EAP employees under state law with higher earnings thresholds than those provided in the Department’s federal regulations.


Earnings Thresholds

18. What are the current earnings thresholds needed for the EAP exemption?

Under the current regulations, an executive, administrative, or professional employee generally must be paid at least $684 per week (equivalent to $35,568 annually for a full-year employee) to be exempt from the FLSA overtime protections. This $684 per week threshold is the standard salary level. 


A computer professional may be exempt if they are paid at least $684 per week or at least $27.63 an hour, if paid on an hourly basis. 


There is no salary level test required to qualify as an exempt outside sales employee. Certain professionals including doctors, lawyers, and teachers are also not subject to the salary tests. 


Finally, the current regulations also contain a less restrictive duties test for certain highly compensated employees who receive total annual compensation of $107,432 or more and are paid at least $684 per week.


19. What is the proposed standard salary level?

The Department is proposing to set the standard salary level at the 35th percentile of weekly earnings of full-time salaried workers in the lowest-wage Census Region (the South). Using 2022 data, the proposed salary amount would equal $1,059 per week (which is $55,068 annually for a full-year worker). 


20. Why is the Department proposing to set the standard salary level at the 35th percentile of weekly earnings of full-time salaried workers?

In updating the standard salary level, the Department seeks to more effectively identify who is employed in a bona fide executive, administrative, or professional capacity. The proposal updates the standard salary level to account for earnings growth since the 2019 rule and adjusts the salary level methodology based on the lessons learned in recent rulemakings. 


21. What salary levels have the Department proposed to apply in U.S. territories?

This proposal would restore the Department’s longstanding policy prior to 2019 of only setting special lower salary levels for employees in those U.S. territories that are not subject to the full federal minimum wage (currently $7.25 per hour). Accordingly, the Department proposes to apply the standard salary level ($1,059 per week) to employees in Puerto Rico, where the federal minimum wage has applied since 1996; Guam, where the federal minimum wage has applied since at least 1957; the U.S. Virgin Islands, where the federal minimum wage has applied since 1989; and the CNMI, where the federal minimum wage has applied since 2018.


The Department proposes to set a special salary level for employees in American Samoa equal to 84 percent of the standard salary level ($890 per week, based on a proposed standard salary level of $1,059 per month), since American Samoa remains subject to special minimum wage rates below the federal minimum wage. American Samoa is scheduled to increase its minimum wage rates until they equal the federal minimum wage. The Department proposes that 90 days after the highest industry minimum wage for American Samoa equals the federal minimum wage, the full standard salary level would apply for all EAP employees in all industries in American Samoa.


22. Is the Department proposing to change the special base rate for employees in the motion picture industry?

The current regulations permit employers to exempt employees in the motion picture industry who are paid a specified base rate per week (or a proportionate amount based on the number of days worked), so long as they meet the duties test for the EAP exemption. Consistent with its practice in recent rulemakings, the Department proposes to increase the required base rate in proportion to the proposed increase in the standard salary level test, resulting in a proposed base rate of $1,617 per week (or a proportionate amount based on the number of days worked). 


23. Is the Department proposing to increase the salary level for highly compensated employees?

The Department is proposing to set the Highly Compensated Employee (HCE) annual compensation level equal to the 85th percentile of earnings for full-time salaried workers nationwide. Based on current data, the proposed HCE threshold would be $143,988 per year, of which at least $1,059 per week (the proposed standard salary level) would have to be paid on a salary or fee basis. The Department believes that its proposed methodology results in an HCE level that is low enough to not restrict the use of the HCE test for employers in low-wage regions and industries, and high enough to guard against the unintended exemption of workers who are not bona fide executive, administrative, or professional employees in higher-income regions and industries.


Future Updates

24. Does the proposed rule address future updates to the earnings thresholds provided in the EAP exemption regulations?

The Department is proposing a mechanism to automatically update the earnings thresholds every three years to ensure that they remain effective tests for exemption. If finalized, this proposal would ensure that the Department can timely and efficiently update the earnings thresholds in future years to reflect current wage data. Experience has shown that the salary level test is a strong measure of exempt status only when it is up to date. Left unchanged, the test becomes substantially less effective as wages for overtime-protected workers increase over time. Automatically updating the salary level and HCE total annual compensation requirement using the most recent data will ensure that these tests continue to accurately reflect current economic conditions.


25. How is the Department proposing to automatically update the salary level and HCE total compensation levels?

The Department is proposing to update the standard salary level and the HCE total compensation requirement every three years to reflect current earnings data. Specifically, the Department is proposing to update the standard salary level by adjusting it to remain at the 35th percentile of weekly earnings of full-time nonhourly workers in the lowest-wage Census Region (currently the South). The Department is proposing to update the HCE total annual compensation requirement to remain at the annualized weekly earnings of the 85th percentile of full-time nonhourly workers nationally. The Department proposes to update both of these thresholds using the most recent available four quarters of data, as published by BLS, preceding the publication of the Department’s notice to automatically update the thresholds.


Because the proposed special salary level for American Samoa and the base rate for the motion picture industry are set in relation to the standard salary level, those earnings thresholds would also reset at the time the standard salary level is updated. At least 150 days before the date of the update of the standard salary level and the HCE total annual compensation requirement, the Department would publish in the Federal Register a notice with the new earnings levels described above.


26. Does the proposed rule include any special exceptions where the earnings thresholds would not be automatically updated?

The Department’s proposal includes a provision allowing the Department to temporarily delay a scheduled automatic update where unforeseen economic or other conditions warrant. This feature would afford the Department added flexibility to adopt to unforeseen circumstances without sacrificing the benefits provided by automatic updating.


Impact

27. What are the estimated costs, benefits, and transfers of the proposed rule?

The Department estimates that in Year 1, the proposed rule would impose $1.2 billion of direct costs on employers, including $427.2 million in regulatory familiarization costs, $240.8 million in adjustment costs, and $534.9 million in managerial costs. The Department estimates that the proposed rule would result in a Year 1 income transfer of $1.2 billion from employers to employees, predominantly from new overtime premiums, or pay raises to maintain the exempt status of some affected employees. Beyond these wage transfers, the proposal could reduce the risk of misclassification, increase worker productivity, reduce employee turnover, and increase personal time for workers. 


28. How many employees would be impacted by the proposed salary level increase?

In the first year, the Department estimates that 3.4 million workers exempt under the current regulations who earn at least the current weekly salary level of $684 but less than the proposed salary level of $1,059 would, without some intervening action by their employers, become newly entitled to overtime protection under the FLSA. 


Similarly, the Department estimates that an additional 248,900 workers who earn at least $107,432 per year (the current HCE total annual compensation level) and who meet the minimal HCE duties test but not the standard duties test, would, without some intervening action by employers, become eligible for overtime if the HCE total annual compensation level were increased to the proposed level of $143,988 per year. 



Source: U.S. Department of Labor – Frequently Asked Questions for the Notice of Proposed Rulemaking: Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees

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Finger Lakes Homeowners: Is Your Insurance Ready for Spring and Summer Storms?

April 27, 2026
Living in the Finger Lakes, especially throughout Canandaigua and Ontario County, offers a quality of life that is hard to match. The lakes, the landscape, and the changing seasons are part of what makes this area special. Those same characteristics, however, also create very specific risks to your home and property. Many of these risks are not fully understood until a loss occurs. This overview is meant to help bring clarity before that happens. Heavy Rain and Flooding: A Common Misunderstanding Spring in our region often brings a combination of heavy rainfall and saturated ground, sometimes alongside lingering snowmelt. When the ground can no longer absorb water, it finds its way into basements and lower levels. What many homeowners do not realize: • Standard homeowners insurance does not cover flood damage • Sewer or drain backup coverage is not automatically included • Even minor water intrusion can result in significant repair costs Flooding remains one of the most common and misunderstood gaps in coverage. Summer Storms and Wind Damage Severe weather events have become more frequent and more intense in recent years. Across the Finger Lakes, we regularly see: • Trees falling onto homes or structures • Roof and siding damage from high winds • Power surges impacting appliances and electronics While many of these losses are typically covered, there are important considerations: • Tree removal coverage is often limited • Poorly maintained trees can create complications in claims • Deductibles may be higher than expected, especially for wind-related losses Tornado Activity in Upstate New York Tornadoes are not something most people associate with our region, but they do happen in upstate New York. They are often smaller in scale, but still strong enough to damage roofs, garages, sheds, outbuildings, and surrounding property. In many cases, tornado-related damage is covered under a standard homeowners policy. The bigger concern is whether homeowners have reviewed their limits, deductibles, and property details before a loss occurs. Hail Damage: Often Overlooked Hail damage does not always present itself immediately. Over time, it can: • Compromise roofing materials • Reduce the lifespan of your roof • Lead to leaks or structural issues later on An important detail many homeowners are unaware of: some policies now settle roof claims based on actual cash value rather than full replacement cost, which can significantly reduce claim payouts. Lakefront and Hillside Exposures The natural features that define the Finger Lakes also introduce unique risks: • Shoreline erosion • Slope instability • Ground shifting following heavy rain It is important to understand: • Land itself is not insurable • Earth movement, including landslides, is typically excluded These are among the most significant uncovered exposures in our area. Lightning and Power Surges A single storm can damage electronics, appliances, and home office equipment. While coverage may apply, it is often subject to policy limits, deductibles, and specific conditions. If you work from home or rely on expensive electronics, it is worth reviewing how your policy handles power surge damage before you need to file a claim. What Homeowners Often Learn Too Late After working through claims with families across the region, a consistent pattern emerges: “I thought that was covered.” “No one explained that to me.” “I wish I had reviewed this sooner.” Insurance is not just about having a policy in place. It is about understanding how that policy responds in real-world situations. A Local Approach to Reviewing Your Coverage As part of the Finger Lakes community, we believe homeowners should have a clear understanding of their coverage before they need to rely on it. We offer straightforward, no-pressure coverage reviews that include: • A clear explanation of your current policy • Identification of potential gaps based on local risks • Honest answers to your questions • Guidance on whether any adjustments make sense for your situation Looking Ahead Seasonal weather in the Finger Lakes is predictable in one sense: it will come. The better question is whether your coverage reflects the realities of where you live. Taking the time to review now can help ensure you are prepared when it matters most.

Financial Literacy Month: Why Employers Play a Bigger Role Than They Think

April 9, 2026
April is Financial Literacy Month, and most of the conversation tends to focus on individuals. Budgeting, saving, managing debt, planning for retirement. All important topics, but often framed as personal responsibilities. What gets overlooked is how much of an employee’s financial life is shaped at work. From how pay is structured, to how benefits are communicated, to whether retirement options are understood or even used, employers have a direct influence on how confident and informed employees feel about their finances. It is not always intentional, but it is significant. Where Financial Literacy Shows Up at Work For many employees, the workplace is the primary place where financial decisions are made or reinforced. Think about what flows through an employer: Paychecks and how they are calculated Tax withholdings and deductions Health insurance contributions Retirement plan participation and employer match Bonuses, commissions, and variable compensation These are not small details. They are the building blocks of how employees understand their income, manage expenses, and plan for the future. When those elements are clear and easy to navigate, employees tend to feel more in control. When they are confusing or inconsistent, it can lead to frustration, disengagement, or avoidable financial stress. The Reality: Many Employees Are Still Guessing Even in well-run organizations, it is common for employees to have gaps in understanding. Questions like: “Why did my paycheck change this period?” “What exactly is being deducted from my pay?” “Am I contributing enough to my 401(k)?” “How does my health plan actually impact my out-of-pocket costs?” These are not uncommon, and they are not always asked out loud. When employees are unsure, they often make assumptions or avoid decisions altogether. That might mean underutilizing benefits, delaying retirement contributions, or feeling less confident about their financial situation overall. Why This Matters More Than It Seems Financial literacy is not just a personal issue. It has a direct impact on the workplace, and employees who feel financially uncertain are more likely to: Experience stress that carries into the workday Be distracted or less engaged Delay important decisions like retirement planning Ask more reactive questions that take time to address On the other hand, when employees understand how their pay and benefits work, there is a noticeable shift. Communication becomes easier. Trust increases. Fewer issues escalate into larger problems. It is not about expecting employees to become financial experts. It is about creating an environment where information is clear and decisions feel manageable. Where Employers Have the Most Influence Employers do not need to overhaul their entire approach to make an impact. In many cases, financial clarity improves when existing processes are just a little more intentional. A few areas tend to have the biggest influence: Payroll Transparency Pay statements should be easy to read and consistent. Employees should be able to quickly understand their gross pay, deductions, and net pay without needing to ask for clarification every time something changes. Even small improvements in how payroll information is presented can reduce confusion. Benefits Communication Open Enrollment is not the only time benefits need explanation. Employees often need reminders and context throughout the year. Clear explanations around what plans cover, how contributions work, and how to use benefits in real scenarios can make a meaningful difference. Retirement Plan Engagement Offering a retirement plan is one thing. Helping employees understand how to use it is another. Employers who provide basic education around contribution levels, employer match, and long-term impact tend to see stronger participation and better outcomes. Consistency Across Systems When payroll, benefits, and HR systems do not align, employees feel it. Conflicting information or multiple places to find answers creates friction. Even if the underlying services are strong, the experience can feel disjointed if everything is not connected. Financial Literacy as a Workplace Advantage Financial Literacy Month is a good reminder that supporting employees in this area is not just a benefit. It is part of how a business operates. Employers who prioritize clarity tend to see:  Fewer payroll and benefits questions More confident employees Better utilization of offered benefits Stronger overall engagement It does not require a complete redesign. Often, it is the result of tightening communication, simplifying access to information, and making sure systems are working together. At Simco, this is something we see regularly. When payroll, HR, benefits, and retirement services are aligned, it becomes much easier for employers to provide a clear and consistent experience without adding more administrative burden. A Few Practical Steps to Start With If Financial Literacy Month is a prompt to take action, it does not need to be complicated. A few focused steps can go a long way: Review a sample of employee pay statements and ask if they are easy to understand at a glance Look at how benefits information is shared outside of Open Enrollment and where there may be gaps Check that retirement plan details, including employer match, are clearly communicated and easy to access Identify whether employees have one clear place to go for payroll, benefits, and HR information Ask managers or HR team members what questions they are hearing most often from employees These are simple starting points, but they often reveal where clarity can be improved. Looking Ahead Financial literacy does not need to be a separate initiative. It is already built into the way employers manage pay, benefits, and communication. April is a good reminder to take a closer look at how those pieces are working together. When employees understand their finances at work, they are more confident, more engaged, and better positioned to make informed decisions. That benefits both the individual and the organization over time.

Spring Cleaning for Employers: 7 HR and Payroll Areas to Review Before Mid-Year

March 10, 2026
By early spring, most organizations have settled into the rhythm of the new year. Payroll cycles are running, benefits elections have taken effect, and hiring plans are starting to move forward. It is also around this time that small administrative issues tend to surface. A deduction that was entered incorrectly. A PTO balance that does not quite look right. A job description that no longer reflects what someone actually does day to day. None of these problems usually start out as major concerns. But when they go unnoticed for months, they can create compliance risks, payroll corrections, or frustrating employee experiences later in the year. Taking a little time now to review a few core HR and payroll areas can help catch issues early and keep your systems running the way they should. 1. Payroll Deductions and Employee Pay Accuracy Payroll errors rarely happen because someone intentionally entered the wrong information. More often they occur because small changes throughout the year were not reflected consistently across systems. Spring is a good time to review payroll deductions line by line and make sure everything matches current elections and agreements. Start by checking: Health, dental, and vision deductions against current benefit elections Retirement contributions and employer match calculations Garnishments or wage attachments that may have started or ended Bonus or commission structures tied to payroll calculations It is also worth confirming that salary adjustments made at the start of the year were properly applied across payroll and HR records. A mismatch between HR systems and payroll can create issues that compound over time. Run a payroll audit report if your system allows it. Compare gross wages, deductions, and net pay for a sampling of employees across departments. Look for unusual fluctuations or rounding inconsistencies. Even one small discrepancy can create confusion for employees and require retroactive corrections later. 2. PTO Balances and Accrual Policies Paid time off policies can quietly become inconsistent if they are not reviewed periodically. Accrual rules may have changed, new hires may have different policies than long-tenured employees, and carryover limits can easily be overlooked. Take time this spring to verify that PTO balances reflect the rules outlined in your employee handbook. Focus on questions such as: Are accrual rates being applied correctly based on tenure? Are carryover limits being enforced as expected? Have any manual adjustments been made that need documentation? Do employees clearly understand how their PTO accumulates and resets? This review also helps identify employees who may have unusually high PTO balances. Addressing those early can help avoid operational challenges later in the year when many employees begin using vacation time. 3. Employee Classification and Job Roles Misclassification remains one of the most common compliance risks employers face. Over time, job responsibilities evolve, and a position that once qualified for a particular classification may no longer meet the criteria. Use this time to review whether employees are properly classified as exempt or non-exempt under wage and hour laws. Look closely at: Employees who received promotions or expanded responsibilities Positions that involve supervisory duties Roles that combine administrative and operational tasks Job descriptions should accurately reflect what employees actually do day to day. If responsibilities have shifted significantly, the classification may need to be reevaluated. Clear documentation is important here. Updated job descriptions help support classification decisions and provide clarity for both employees and managers. 4. Employee Handbook and Workplace Policies Policies that felt current a year ago may now need adjustments. Workplace expectations evolve quickly, and spring is a practical time to review whether your handbook reflects the way your organization actually operates. Pay particular attention to policies related to: Remote or hybrid work expectations Use of artificial intelligence tools in the workplace Timekeeping and attendance procedures Workplace conduct and communication standards It is also wise to confirm that any state-specific policies remain compliant with current regulations. If your workforce spans multiple states, small policy differences may need to be addressed. Updating a handbook does not necessarily mean rewriting the entire document. Sometimes a few targeted revisions can ensure employees have clear guidance and leadership has consistent standards to follow. 5. Benefits Eligibility and Employee Status Changes Benefits eligibility errors can happen when employee status changes are not updated in a timely manner. Review employees who experienced changes during the past several months. This includes individuals who moved from part-time to full-time status, those who returned from leave, and employees who changed departments or compensation structures. Make sure eligibility for benefits matches the organization’s plan requirements. Check that: Newly eligible employees were offered enrollment opportunities Terminated employees were removed from benefit plans promptly COBRA notifications were issued when required Dependent eligibility rules are being followed consistently Even minor oversights in this area can create complications with carriers or leave employees temporarily without the coverage they expect. 6. Workers’ Compensation Classifications Workers’ compensation classifications often remain unchanged year after year, even when job duties evolve. If employees begin performing different tasks than originally described, their classification may no longer match the level of risk associated with the role. Incorrect classifications can lead to inaccurate premium calculations and potential audit findings later. Take time to review job roles that involve: Operational or physical work environments Field service or travel responsibilities Equipment use or safety considerations Confirm that the workers’ compensation codes associated with these positions still reflect the work being performed. Employers who review this annually are often better prepared when insurance audits occur. 7. HR and Payroll System Alignment Finally, look at how your HR and payroll systems interact with each other . Many organizations rely on multiple platforms for HR, payroll, benefits administration, and reporting. When systems do not communicate effectively, teams often compensate by manually transferring data between them. That can create hidden inefficiencies and increase the chance of errors. Ask yourself: Are employee records consistent across all systems? Are onboarding updates automatically reflected in payroll and benefits platforms? Are reporting tools pulling accurate workforce data? For some employers, this review reveals that processes have become more manual than intended. Working with a partner that integrates HR, payroll, benefits, and insurance services can make much of this coordination significantly easier. At Simco , we help employers align these systems so information flows more smoothly and administrative teams spend less time reconciling data. A Small Review Now Prevents Bigger Issues Later Spring reviews do not have to be complicated or time-consuming. Even a few focused hours reviewing payroll accuracy, employee classifications, and benefits records can uncover issues that are much easier to fix now than later in the year. Employers who take time to review these areas early often avoid the mid-year scramble that happens when small inconsistencies finally surface. A short operational check-in today can help ensure the rest of the year runs more smoothly for both your leadership team and your employees.

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