New Overtime Rules Affect Salaried Employees

The Department of Labor has issued a new rule, effective December 1, 2016, which will require employers to calculate and pay overtime wages to many employees who are salaried and, therefore, were previously exempt from overtime pay requirements. 

Most executive, administrative, professional, and outside sales employees who are paid on a salary basis were previously NOT required to be paid overtime wages for hours worked in excess of 40 hours per week.

The new rules will require employees who fit under the executive, administrative, and professional categories (with some exceptions) who receive a total compensation package below $47,476 a year or $913 to be paid overtime if they work more than 40 hours in a week.

There are certain exceptions for the calculation of an employee's salary. For purposes of the law, "salary" includes all guaranteed payments and up to 10% of commissions or bonuses.

If you have any questions or would like to know more about these new rules, please give us a call at 855-522-5291, or fill out our contact form. We would be happy to set up an appointment with you.

UPDATE:  On November 22, 2016, a Federal Judge entered a preliminary injunction halting the new overtime rules during the litigation.  Until the Court determines whether or not the new rules are constitutional, employers should wait and see what happens.  Tapella & Eberspacher LLC recommends that employers not implement a different overtime plan until the court system and Department of Labor sort out what the rules will look like.
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