The US Department of Labor (DOL) changes overtime rules as of 12/1/16 which more than doubles the salary threshold for overtime wage exemption. The Fair Labor Standards Act (FLSA) requires that eligible employees be paid time and a half for all hours worked over 40 hours in a work week.
However, overtime rules do not apply to certain salaried “white collar” workers:
Executive: Directs work and can hire/fire employees
Administrative : Non-manual work that requires judgment on matters of significance
Professional : Performs intellectual work based on advanced knowledge
Computer Employees: Employed as a systems analyst, computer programmer, or software engineer
Highly Compensated Individuals (up to $134,004 per year under specific circumstances)
The specific exemption rules for each class listed above can be found here: http://webapps.dol.gov/elaws/whd/flsa/Overtime/menu.htm
These exemptions do not apply to manual laborers who perform repetitive operations with their hands such as production, maintenance, construction, carpenters, electricians, mechanics, plumbers, iron workers, or craftsmen no matter how highly they are paid.
All other employees who make up to $47,476 per year or $913 per week will be eligible for overtime pay.
To start preparing now:
- Conduct an internal audit
- Give raises to those employees who are close to the salary threshold
- Develop more stringent overtime pay policies
If you have employees that fall into a gray area of classification, your labor attorney would be able to provide you with sound advice.
For more information on how the new white-collar exemptions will affect your business, contact Tiffany Passmore, Director of Client Services at: 1 (800) 462-6435 ex. 234 or [email protected]