Editor’s note: On Nov. 22, a federal judge in Texas issued a nationwide injunction on Tuesday against the Obama administration regulation expanding by millions the number of workers who would be eligible for time-and-a-half overtime pay. Intuit® ProConnect™ will continue reporting on this issue as changes comes about. Below is the original article in its entirety.
Whether you need to know the new employee overtime rules for your practice, or want to pass on this information to your clients, you should know that as of Dec. 1, 2016, employers must be in compliance with the Department of Labor’s Final Rule on overtime pay. This Final Rule defines which white collar workers are protected by the Fair Labor Standards Act’s minimum wage and overtime laws.
Here are some key provisions of the Final Rule:
- All workers earning less than $913 per week, or $47,476 annually for a full-year worker, must be paid the overtime rate for any time worked beyond 40 hours per week.
- Overtime pay rate is time and one-half the regular hourly rate.
- The threshold for highly compensated employees has gone up from $100,000 to $134,004.
- Automatic updates to these thresholds will be made every three years, beginning Jan. 1, 2020.
Companies that have not already planned for the increase in wages must act now. If an employer plans to implement one of the first two options below, appropriate methods to track employee’s time before the regulations go into effect should be considered.
Employers generally have three choices for affected employees:
- Limit hours to 40 per week.
- Pay time and one-half their regular hourly rate for all hours worked over that limit.
- Increase exempt employees’ salaries above the $47,476 threshold.
For more information, see the Department of Labor’s Overview and Summary of Final Rule.