New Overtime Rules Take Effect Dec. 1, 2016

New Overtime Rules Take Effect Dec. 1, 2016

The U.S. Department of Labor’s new overtime rules go into effect December 1, 2016, and will increase the salary threshold that usually determines who qualifies for overtime pay from $455 per week, or $23,660 for a full-time yearly worker, to $913 per week, or $47,476 a year for a full-time yearly worker.

After December 1, 2016, workers making less than $913 per week, or $47,476 annually for a full-year worker, would be entitled to overtime and will not be subject to the white-collar exemptions.  As such, employees that make less than the new threshold will be considered non-exempt and entitled to overtime at the rate of time and a half of the regular compensation for hours worked more than 40 hours per week.

According to the Department of Labor statistics, approximately 4.2 million workers in the United States and 134,000 workers in the state of Ohio will be impacted by the new rules.

Compliance strategies

Strategies to comply with the new overtime rules include:

  • Keeping employees at their current rate of pay and not allowing them to work more than 40 hours per week;
  • Keeping employees at the current rate of pay and paying them time and a half for hours worked more than 40 hours per week;
  • Increasing employees’ pay to meet the new threshold of $913 per week, or $47,476 annually for a full-time worker.

On Tuesday, September 20, 2016, 21 states and a group of more than 50 business groups filed separate lawsuits seeking to overturn the new overtime regulations, arguing that they violate the U.S. Constitution and exceed congressional authority.

Employers would be wise to prepare to comply with the new regulations despite the pending lawsuits challenging the new overtime rules.

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Martin Boetcher is an attorney with Harrington, Hoppe & Mitchell. He can be reached at mboetcher@hhmlaw.com or (330) 744-1111.