Can we help you find a topic?

Proactive. Pragmatic.
Committed To Obtaining Results.

New overtime rules to take effect December 1

Big changes are coming to federal overtime laws.

Starting December 1, 2016, any employee making less than $913 per week ($47,476 per year) will be entitled to overtime pay for working more than 40 hours in a week. Employees making more than this amount may still be entitled to overtime compensation, depending on their job duties, but the new threshold means that all employees making less than $913 per week, regardless of their job title or responsibilities, are entitled to overtime pay if they work more than 40 hours in a workweek.

As Fortune reports, the new salary threshold is nearly double the previous amount.

It is crucial for both employers and employees to understand how this new rule will impact them.

How the rules affect employees

The Department of Labor estimates that this change will result in wage increases for about 4.2 million workers. That is a huge number, and the change could make a big financial difference for employees who are underpaid and overworked.

It’s important for employees to be aware of the new threshold, as well as exactly how much money they make, so that they can determine whether their employer is required to pay them overtime if they are working more than 40 hours in a workweek.

Also as part of the new rules, the salary threshold is scheduled to update every three years based on average income levels in certain parts of the country. The first adjustment to the salary threshold is scheduled to take effect on January 1, 2020.

How the rules affect employers

Like employees, employers should be aware of exactly how much money their employees make. Under the new regulations, some workers who are currently exempt from federal overtime laws will now be entitled receive one-and-one-half times their regularly hourly rate of pay for any work performed over 40 hours in a workweek. This may lead to a significant increase in how much money certain employees make, which may raise financial concerns for many businesses.

Absent certain exceptions, small businesses with annual revenues below $500,000 fall outside the scope of the FLSA and are therefore exempt from the new rules. However, small businesses in certain industries, as well as all businesses with annual revenues in excess of $500,000, may need to consider restructuring their payrolls or their workforce. Companies that are subject to the new regulations should have a plan in place to ensure that they remain in compliance with federal overtime laws while minimizing any disruption to revenues and productivity.

Whether you are an employee or an employer, mark your calendar for December 1st and be aware of how new overtime rules will affect you.

Dedicated Litigators And Knowledgeable Legal Advocates

The Attorneys of Katz Melinger PLLC