Overtime Changes for Salaried Employees

Would it surprise you to find out that your salaried employees may have a legal right to overtime pay?  According to the Fair Labor Standards Act (FLSA), a “white collar” exemption, which can protect a business from the liability of paying overtime for certain salaried positions, must meet reasonable criteria to be accepted by the Department of Labor (DOL).  There are 2 tests the DOL considers: 1) the salary basis test and 2) the jobs duties test.

As a result of June 30th proposal from the Department of Labor, overtime requirements under the FLSA are experiencing some significant changes.  To date, the salary requirement threshold was at $23,660 or $455 per week.  This means that if your employee earns less than $455 per week and is required to work more than 40 hours per week, the employee is entitled to overtime pay even if they are a salaried employee.  As a result of the recent proposition by the Department of Labor, this threshold will shift to $50,440 or $970 per week.  This means that (as early as January 2016) an employee earning less than this (new) proposed amount will be eligible for overtime pay.

Have questions about how this may impact you/your business?  Contact us today!