On May 17, 2016, the U.S. Department of Labor announced new overtime pay rules that affect a majority of businesses and employees throughout the country. The updated rules make major changes to existing law, and with the deadline for compliance approaching on December 1st of this year, every company and its workers must know their rights and responsibilities. The employment attorneys at Weaver, Bennett & Bland, P.A. put together a list of three points that you need to know about these new rules.
Watch out for the new overtime pay threshold:
Before the new rules, any business could classify a worker as a “manager,” and as long as the worker made above $23,660.00 in salary per year, the business would be exempt from paying the worker overtime (time-and-a-half). No longer. The previous pay threshold has now been increased to $47,476.00 per year. So even if an employee is considered a “manager,” if that employee makes less than $47,476.00 per year and works more than 40 hours per week, he or she is entitled to overtime pay.
But there are exceptions:
If you operate a charity or our business does not generate more than $500,000.00 in annual revenue, then the new overtimes rules probably do not apply to you. But, if your charity generates more than $500,000.00 in annual revenue for a “business purpose,” then you are likely subject to the new overtime rules.
What’s a business to do?
In general, any business subject to the DOL’s overtime update has a choice to make, and this choice involves three options. First, your business may decide to simply pay all workers who earn less than $47,476.00 per year time-and-a-half for every hour worked above 40 per week. A second option would be to increase your employees’ salaries above the new salary threshold amount, so they are then exempt from the updated overtime rules. Finally, you could halt employee work at 40 hours per week, to not be forced to pay overtime. Of course, you can always choose any combination of these three options.
Experts have estimated that over 12.5 million workers will become newly eligible for overtime pay on December 1. Make sure your business does not run afoul of these new, and often tricky, overtime rules.
For legal advice concerning your specific business matters, contact an experienced business law attorney.
Matthew Villmer is a business and civil litigation attorney at Weaver, Bennett & Bland, P.A. Contact Matthew at Weaver, Bennett & Bland, P.A. at (704) 844-1400. The information contained in this article is general in nature and not to be taken as legal advice nor to establish an attorney-client relationship between the reader and Matthew Villmer or the law firm of Weaver, Bennett & Bland, P.A.
Weaver, Bennett & Bland, P.A. serves clients in North Carolina and South Carolina. Located in the town of Matthews between Mecklenburg and Union Counties in North Carolina since 1982, we proudly provide legal services throughout Charlotte, Matthews, Mint Hill, Stallings, Indian Trail, Monroe, Marvin, Wesley Chapel, Weddington, Waxhaw, and other surrounding communities in the Greater Charlotte area. Our clients range from national corporations and major banking institutions to individuals and local companies.