New Department of Labor Overtime Pay Rule*

In a few months, the world of overtime pay in the US will change. A new US Department of Labor rule takes effect December 31, 2016, and small businesses, large corporations, and everyone in between are preparing for implementation.

When the rule goes into effect, exempt employees earning a salary under the new threshold of $47,476 per year must earn overtime pay for overtime hours. That’s more than double the $23,660 threshold established in 2004. (Let that sink in a moment.)

What are some likely scenarios employers/employees will face for salaried workers making less than $47,476?

·       Employees will need to keep track of hours (when it wasn’t required before). Health Care and Food Service industries are likely to be impacted the most.

·       Companies will assess raising base salaries for new hire/junior employees in fields where starting salaries are close to the threshold.

·       Organizational charts will need to be reviewed for responsibilities of salaried workers to determine whether additional layers of management are needed to oversee workloads.

·       Employers/Employees will track company phone calls/emails outside of “business hours.”

·       Businesses will review options of raising salaries, paying overtime, adding employees, seeking contract workers or some combination thereof.

It may take some time for both employees and businesses to navigate through the changes. In the meantime, employers are crunching numbers, asking questions, and figuring out next steps.

For more information, please call the office of Ronald Castor LC at 913.469.9113.

*Source: Kansas City Business Journal March 2, 2016