Overtime rule set to take effect December 1st

The Department of Labor’s new overtime rule, published in May of 2016, is set to begin in December. If you are an employer, there are few things to be familiar with when navigating this rule if you haven’t already done so.

The rule drastically increases the salary threshold for exempt employees, from $23,660 to $47,476 annually. The DOL rule will automatically increase the salary threshold every three years, starting Jan. 1, 2020.

Some other things to consider, courtesy of National Restaurant Association:

  1. Keep your eye on Dec. 1. Despite challenges to the rule, including pending bills in the House and Senate and the litigation in Texas, compliance is expected to begin on the planned date.
     
  2. The salary level for exempt employees is going up. As of Dec. 1, exempt executive, administrative and professional employees must earn an annual salary of at least $47,476, or $913 per week. Nonexempt employees must be paid 1.5 times the “regular rate of pay” for all hours worked over 40 hours per workweek.
     
  3. Nondiscretionary bonuses, incentives, and commissions may satisfy up to 10 percent of the salary requirement, but must be paid at least quarterly.
     
  4. Perform accurate recordkeeping and revise job descriptions. To avoid potential wage and hour lawsuits, keep track of the hours that nonexempt employees work and their rates of pay. And, to the extent possible, have nonexempt employees sign off on their time sheets. Also, revise job descriptions for your reclassified employees.