New Labor Rules Bring Overtime Pay To Millions Of Salaried Employees

Let’s say you’re an assistant manager at a fast-food restaurant making a salary of $35,000 per year. Your restaurant is drastically understaffed, and even though you work up to 20 hours of overtime per week, you don’t receive any additional compensation for the extra hours. Is this OK?

Somewhere between 4.5 and 12.5 million Americans find themselves in a similar situation every week. Under the current Fair Labor Standards Act, salaried workers making more than $23,660 per year are not eligible for overtime pay if their jobs include some traditionally “white collar” duties (such as restaurant management).

New rules announced on May 18 by the Department of Labor will change that. Starting December 1, 2016, salaried employees who make less than $47,476 per year will be eligible for time-and-a-half overtime pay when they work more than 40 hours in a week. The new rules also include a system that will automatically increase the salary threshold every three years, meaning that, in the future, even more employees will qualify for overtime pay.

To comply with the new regulations, your employer may choose to do one of three things:

  1. Your employer may begin paying you time-and-a-half for your overtime.
  2. Your employer may raise your salary above $47,476.
  3. Your employer may limit the amount of hours you can work to 40 hours per week, increasing the amount of time you have to spend with family or on additional training.

Importantly, if you currently earn regular bonuses or performance incentives, your employer may choose to use that money to satisfy up to 10 percent of your new overtime pay.

If you are a salaried employee and are not used to keeping track of your hours, you may have questions about how your wages will be paid after December 1. You should seek the advice of counsel to determine whether you are eligible for overtime pay, and when the time comes, whether your employer is compliant with the new rules.

 

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