What the new overtime law means for you

overtime clock concept

Previously I discussed a potential new overtime law that would require employers to pay certain staff overtime for working more than 40 hours per week. Well, that law passed. Now, most employees who earn between $455/week (old standard) and $913/week (new standard) must be paid overtime pay if they work more than 40 hours during a week. I can honestly say, this is the largest wage and hour change I’ve experienced professionally and my head is still reeling from it!

So, how do you prepare for this? First, it’s important to know who the new law will affect. Previously, in order to qualify for an executive, administrative, or professional exemption, employees must have been: paid on a salary basis; paid at least a fixed minimum salary per week; and perform job duties that qualify for the claimed exemption. The Department of Labor felt that many lower-level management employees were being classified as exempt, even though they were performing non-exempt work the majority of the time. The DOL wanted to protect these workers who were performing duties that should have resulted in them receiving a different kind of compensation. Whether you agree or disagree, it’s a moot point now. We must be in compliance with the new guidelines by December 1, 2016.

The duties test did NOT change – only the salary test. So, now you need to evaluate the following:

  • Is my job description current with the ACTUAL essential functions of the job
  • Does my employee need more than 40 hours during the work week to successfully accomplish these tasks?
    • If yes: Can I move some tasks to another employee
      • If yes: limit work week to 40 hours per week
      • No further change necessary
    • If no: limit work week to 40 hours per week – no change necessary!

When it comes right down to it – it’s THAT simple.

Visit stopknockingonmydoor.com to schedule your free consultation and to learn more about correctly classifying your jobs.

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