Will the new overtime rule affect your small business?
The answer is likely, Yes. The new overtime rule does not exempt small business like many other labor laws. Here is the short and sweet version of what the new rules do: Increases the minimum salary threshold at which a full-time salaried worker can be “exempt” from overtime rules from $23,660 to $47,476 annually, or from $455 to $913 weekly. The salary level will be adjusted every three years. But, for the first time employers can include non-discretionary bonuses and commissions to comprise up to 10% of the salary level.
The new overtime rule will go into effect on December 1, 2016. How do you know if the new rules will affect your small business? You will need to answer these questions.
How can you comply with the new overtime rules?
Here are some potential options:
Are any of my employees exempt from the overtime rule?
Yes, some of your employees could be exempt. How do you determine if the employee is exempt? What does not matter is the employee’s job title. It does not matter how swanky the title is, so changing the employee’s job title to “Executive Administrative Professional Assistant” will not affect the employee’s classification. So, do not run out and change all of the job titles in your employee handbook. There are three categories of exempt “white-collar” employees Executive, Administrative, and Professional. The job duties o determines whether the employee falls into one of these categories.
To qualify for the executive employee exemption, all of the following tests must be met:
To qualify for the administrative employee exemption, all of the following tests must be met:
To qualify for the learned professional employee exemption, all of the following tests must be met:
If your small business needs help with legal issues, ask a Small Business Law Firm. We know how to help and understand your situation after all we are a small business, too. Contact us to see how we can help you and your business.
Benjamin F. King
My goal is to bring issues that are often over looked. But, this blog is not legal advice it is only for general information. Each situation is fact specific.