Are you familiar with the new employee overtime pay rules?

May 21, 2016

Do you know how many of your employees are entitled to receive overtime pay?

If you do, you will want to check on this issue again in a couple of months because the rules are changing.

The number of employees who are entitled to get overtime pay is about to explode in size.

Most business owners that are subject to the Fair Labor Standards Act are aware that employees who work more than 40 hours in a work week are entitled to overtime pay UNLESS the employee fits into exemption. (If you do not know this, you might consider reading this post).

Employees that fit into an exemption do not have to be paid over time.  Watch out though because the number of employees who qualify for the exemption is about to drastically drop:

The United States Department of Labor has issued new regulations which take effect this fall change the amount of money an employee needs to make to be exempt from the overtime requirements.

The Current Law

The current test is that workers who exceed 40 hours on the job in a week do not have to be paid at overtime rates if they meet three criteria:

  • They are employed on a salaried basis.
  • Their jobs are primarily professional, administrative or executive.
  • They make at least $23,660 per year.

The New Law

The new regulations double the threshold salary amount at which executive, administrative and professional employees are exempt from overtime pay to $47,476 from the current $23,660.

According to USA Today, this change is “expected to make 4.2 million additional workers eligible to receive time-and-a-half wages for each hour they put in beyond 40 a week.”

How many of those 4.2 million works who are about to become overtime eligible are your employees?

Shawn Roberts

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I write about and try to answer practical Oklahoma legal questions. I tend to focus on estate planning and business issues. I make a living as an attorney working for Resolution Legal Group in Oklahoma City. I am husband to Amy and the father of Sam and David. We live exactly in the path where the "wind comes sweeping down the plains."