In 2014, President Obama directed the DOL to update the overtime rules with the final rule to put more money in the pockets of the middle class workers. These rules become effective December 1, 2016 and businesses have six months to prepare. This change will impact approximately 4 million workers and regardless of the results of the election appear to be “here to stay”.
Here are some important points to remember:
– The threshold for a salaried employee rises from $455 to $913 per week.
– This rule applies to all business in the US.
– If an employee is not at this level you can either:
1. Increase an employee’s rate of pay to the minimum threshold for salary.
2. Pay overtime wages in excess of 40 hours worked.
3. Limit overtime; schedule employees to work only 40 hours per week.
What should you do to prepare?
– Pull a list of all employees below the salary threshold of $913.
– Identify if their position qualifies to be salaried and adjust accordingly.
– Note, salary status is based on wages earned and the work the employee completes for your organization.
Anticipate that a wave of compliance audits will occur as a result of this ruling. Be prepared and do the analysis and make the modifications well in advance of the deadline for change.