Last week, the Labor Department finalized new rules for salaried workers in the United States earning up to $47,476 per year indicating that they now must receive time-and-a-half overtime pay when they work more than 40 hours during a week. This will become effective Dec. 1, 2016. The Labor Department calculates that approximately 4.2 million workers will now become newly eligible for overtime.
US Federal employment law provides two ways for most salaried workers to become eligible for overtime:
- The “duties test”: Salaried employees who are eligible to receive overtime are those that are not spending most of their time exercising decision-making authority such as executives, administrators or managers. This method is open to interpretation.
- Salary level: If a salaried employee makes less than $47,476 per year they are eligible for over- time. This applies to employees who are exercising decision-making authority; if their salary is below the cutoff, they must be paid overtime.
Clients need to be aware of this important federal labor law change and how this may affect their business’ payroll, Workers’ Compensation, and EPLI insurance policies
Greg Schaefer, President of Schaefer Enterprises
Make sure that you are adequately prepared for the changes to become effective at that end of this year. The time to act is now. Call us at: 877.237.2481. We are here to help.
