On May 18, 2016 the Department of Labor announced a final ruling on overtime wage payment qualifications, which will impact businesses with salaried employees who make less than $47,476 annually and work more than 40 hours per week. The minimum salary requirement applies to all white-collar workers who are classified as exempt executive or administrative employees, and to many who are classified as exempt professional employees. Employers are expected to comply by December 1, 2016. However, this ruling may not affect all employers; you should seek legal council or speak to your business advisor to determine if these new regulations will impact your business.
Under the proposed overtime regulations, employers will be faced with three options to consider for qualifying salaried employees:
Under the new rules, this salary threshold will increase every three years. It will be set at the 40th percentile of weekly earnings among full-time salaried (not necessarily exempt) employees in the country’s lowest income region – currently the South. It is expected that the next change, which will be effective January 1, 2020, will increase the minimum salary to approximately $51,168.
Employers should understand how the changes affect them and the actions they can take to best help their businesses and ensure that they are fairly compensating their employees. The following are some steps employers can take to help them prepare for the new overtime regulations:
Some state laws create different minimum salary levels. When state laws differ from the FLSA, an employer must comply with the standard most beneficial to employees. Presently, the federal minimum salary level is higher than any state-mandated minimum, and therefore must be followed. Click here to visit the Department of Labor website for additional information.
In situations where your company may be subject to this ruling, IOI does provide powerful, comprehensive Time and Attendance solutions to effectively manage your employee data. Call 888-697-0021 or email email@example.com for more information.