Do you have employees who are on salary? Do those employees ever work more than 40 hours in a week, for whatever reason? If the answer is yes to these questions, your world is about to get more complicated and probably more expensive.
Please stay with me. I need to get into the weeds, but just for a minute.
The current Department of Labor (DOL) overtime exemption threshold for “white-collar” employees is anyone with a salary of at least $23,666 annually, or $455 per week. Exempt means the employer is not required to pay overtime if and when this class of employee works over 40 hours per week. This threshold applies to all businesses, regardless of size or number of employees.
Here’s the news: The DOL has announced that as of Dec. 1 that overtime exemption threshold will essentially double, to $47,476 annually, or $913 per week.
So anyone currently receiving a salary of less than this new amount will soon convert to non-exempt status and must be paid overtime when they work more than 40 hours a week.
The reason I’m concerned about this change is because of the size of the increase.
I fear this new threshold is going to catch and hurt a lot of unaware small businesses in its net. So I took this concern to my small business audience in our online poll recently and asked if they knew about the new overtime exemption changes.