The Department of Labor’s new overtime rule takes effect Jan. 1. The rule
increases the overtime salary threshold from $23,660 per year ($455 per week) to $35,568 per year ($684 per week), which makes an additional 1.3 million American workers eligible for overtime. The rule also:
• Raises the total annual compensation requirement for “highly
compensated employees” from $100,000 to $107,432.
• Allows employers to use annual or more frequent non-discretionary
bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the standard salary level.
• Revises special salary levels for workers in U.S. territories and the motion picture industry.
Here’s how to prepare:
- Review overtime, scheduling, and employee exemption policies. Some employees will need to be reclassified as nonexempt from overtime pay. But remember that employees making more than $35,568 per year aren’t automatically considered “exempt.” An employee’s job duties must also primarily involve executive, administrative, or professional duties, as defined by the DOL. See a more expanded explanation in the current issue of Ag Innovator at FarmEquip.org/AGI.
- Start tracking employee time. According to labor experts, tracking time is the best way to prepare for regulatory changes and avoid future wage-and-hour lawsuits. With accurate employee time data, you can make sound decisions about employee classifications.
- Make any necessary changes to employee classifications before Jan. 1. Don’t get hit with a costly wage-and-hour lawsuit. Overtime violations are among the most expensive and most common wage-and-hour violations, accounting for 83 percent of the money recovered from wage-and-hour lawsuits.
Questions? Use the Association’s attorney-consultation member service.
Members are entitled to 60-minute, no-cost, confidential consultations with
HR attorneys at Nilan Johnson Lewis. Call (612) 305-7500.