Ready or Not - New FLSA Overtime Law Set to Launch, Fall 2016
So your new business is open to the public (finally) and you think the hard part is over. However, as many new business owners quickly become aware, there are rules, laws, and regulations that must be abided by. Usually, a new business owner has to learn on the fly to comply with these regulations.
OverviewFormer congressman, Andrew Young was quoted as saying "Nothing is illegal if a hundred businessmen decide to do it." This isn't true! Don't listen to him! Instead, make sure you are in compliance with the new Federal Overtime law (also known as the "Final Rule"), which will go into effect on December 1, 2016. The final rule changes the salary level that must be met before an employee can be exempt from overtime.
I'll Take the Bad News First: What this changes for employersCome December 1st, the minimum salary threshold will increase from $455 per week ($23,660 per year) to $913 per week, $47,476 annually, and will apply to nearly all employees -- an employee paid less than this threshold amount will be guaranteed overtime pay. Employers will have roughly 200 days to comply with the new regulation following its final publication.
Now, Give me the Good News: Exemptions and Bonus Good NewsThe Final Rule does not alter the job-duties tests under the executive, administrative or learned professional exemptions. Although the threshold amounts may have increased, employers will be relieved that, among other exceptions, there are "white collar" and highly compensated employee exemptions. Contact us now to find out what employees do and do not qualify for one of these exemptions.
Also, for the first time ever, incentive and bonus payments can be counted towards up to 10 percent of the new salary threshold. This news will at least put a smile on a few employers' faces.
Winter is Coming (December 1, that is), Start Preparing: Advice for EmployersThe department of labor even threw employers a bone by specifically suggesting the following advice for how employers may respond to changes to the salary level: (1) Raise salaries to maintain the exemption; (2) Pay current salaries, with overtime after 40 hours; (3) Reorganize workloads, adjust schedules or spread work hours; and (4) Adjust wages.
The best option for an employer varies upon their type of business and how they currently pay their employees. It would be prudent for an employer to review their employees' wage format, the hours each employee typically works in a week, and how much overtime has been paid out versus what would be paid out December 1 forward. The Law Offices of James W. Murphy is here to take a look out your business' current salary format and offer advice on how to most effectively adapt when the new overtime law kicks in. Contact us now!
Law Offices of James W. Murphy - PO Box 1327, Sherborn, MA - (508) 653-7162 - [email protected]