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Dramatic changes by the Department of Labor may impact which of your employees is eligible for overtime!

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New Overtime Rules

Changes taking place December 1, 2016 - are you prepared?

Important and dramatic changes to the federal overtime rules will impact which of your employees will be eligible for overtime. The Department of Labor has released final changes to the regulations governing overtime under the Fair Labor Standards Act (FLSA) White Collar Overtime Exemption. The new rules take effect December 1, 2016.

Minimum Threshold More than Doubles

It is possible that some of your current employees will no longer be exempt from overtime pay. The proposed changes to the overtime regulations will more than double the minimum weekly salary threshold for overtime exemption from $455 per week to $913 a week. This means that the minimum exempt salary threshold would jump from $23,660 to $47,476 annually.

What Does It Mean To You, as an Employer?

  • Any Salary Exempt employee making less than $47,476 annually will have to begin tracking their time and be paid overtime for hours worked over 40 in a week.
  • Employers will have to decide whether to increase their Salary Exempt employee’s wages to meet the new criteria or convert them to being paid on an hourly basis.
  • Employers need to be aware that the minimum salary will increase every three years with inflation.
  • Employers with previously Exempt employees who convert to hourly and travel or work remotely will have to more closely monitor hours worked to ensure compliance with the new overtime requirement.
  • Among the obvious paperwork and financial impacts, employees who feel that they have ascended into salaried status may well feel chagrined to find themselves once again keeping track of their hours.
  • Note that the White Collar duties test to determine if an employee may be classified as Exempt remain unchanged at this time.

What Do I Need to Do?

Human Resources can help you in analyzing your current workforce and developing a plan to assist with the new rules. With our solutions, we can help you prepare for and execute this transition in a manner that is seamless and cost-effective.

If you have questions about the proposed changes, please call us at (888) 459-4700.