On May 18, 2016, the U.S. Department of Labor announced an important change to a component of how and when employees are eligible for overtime. This change affects every employer in the United States and may affect up to four million employees.
In the past, certain salaried employees who made more than $23,660 could be considered “exempt” from overtime if their duties and responsibilities were primarily professional, administrative or executive. Beginning in December of 2016, that salary level increases to approximately $47,476—so if any employee makes less than $47,476, that employee (even if salaried) will be eligible for overtime and should be compensated accordingly.
Importantly, even salaried employees who make more than $47,476 (but less than $134,004) may be eligible to receive overtime if their primary duties are not administrative, professional or executive. This is called the “duties test,” and is a factual analysis that the Department of Labor, courts and lawyers have wrestled with for years. Failure to properly classify employees and pay them appropriately can have devastating financial consequences on employers.
At Patel Burkhalter Law Group, our Employment Law Attorneys have represented employers and employees with overtime questions and are intimately familiar with how the Fair Labor Standards Act and the recent changes may affect your business. Our strategies help protect employers, fairly compensate employees, and provide stability in these uncertain times. With these rule changes in the news, even more attention will be paid to overtime compensation and more employees will wonder whether they are compensated fairly. If you have any questions, or frankly, if you have any employees, please consider reaching out to us so that we can help you navigate these changes.