FLSA Changes & Wage Compression: Insights from Michael Maciekowich

In this segment, Phil Brandt welcomes back Michael Maciekowich to discuss the recent Fair Labor Standards Act (FLSA) changes. Michael highlights the significant 23.4% increase in the exempt employee threshold as of July 1st, with another expected 33% rise in January, totaling a 58% increase. This shift has led to wage compression, requiring companies to adjust their pay structures to prevent previously exempt employees from becoming eligible for overtime.
Michael notes that while reported average wage increases are around 3-5%, ADP data shows total wage adjustments at approximately 5%. Burt Garland adds that the January 1st increase might face legal challenges, unlike the July 1st adjustment, implemented without issue.
Michael also explains how companies, particularly in high-cost areas like New York, are already responding by laying off employees to manage the increased wage burden. The discussion underscores the importance of educating managers about compensation strategies and maintaining transparency to address pay discrepancies and promote organizational equity.
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• $UPDATE: 2024/2025 Com...