Effective December 1, 2016, the federal Department of Labor is making some major changes to overtime rules. The most notable of these changes will be the major increase in minimum required salary for many employees to qualify as exempt from overtime pay. An exempt employee does not have to be paid overtime wages for hours worked in excess of forty in a given workweek.
As many of you know, your employees may be considered exempt from overtime pay if they fit one of several “exempt” categories, including the “executive”, “administrative”, and “learned professional” exemptions. The job duties and many other factors considered for these exemptions will not be changing.
However, for many years, these exemptions could apply only if the employee in question was earning more than $455 per week, which amounts to a yearly salary of $23,660. This December, this figure is changing drastically, effectively doubling to $913 per week, or $47,476 per year. The practical effect is that a very many employees who were formerly exempt from overtime wages must now either be paid overtime or else their wages must be increased substantially.
The implications for small businesses everywhere are wide and far-reaching. Many small businesses have relied for years on the overtime wage exemptions to avoid having to pay overtime for their employees. For those that have, the time is now to determine how you’ll handle this massive rule change. For many, that could mean turning full-time employees into part-time employees. For other businesses it may mean raising certain employees’ wages to meet that minimum. And lastly, for others still, it may simply mean incorporating an overtime system where none existed before.
The employment lawyers and business lawyers at Asheville Legal are well-equipped to field your questions about these processes. We know how overtime wages should be handled in a wide variety of situations. Give us a call today if you want to learn more.