Overtime Changes – Notice of Proposed Rulemaking (NPRM)

The Department of Labor  Wage and Hour Division has proposed, via an NPRM, changes to how overtime may apply to currently exempt employees.  The proposed overtime changes are linked here but in essence, executive, administrative and professional (white collar employees) are entitled to protections under the Federal Labor Standards Act (FLSA) minimum wage and overtime regulations.  What does that mean for you?  Glad you asked.

Currently,  the salary threshold for exemption is $23,660 per year.  One of the key provisions of the proposed rule is raising this threshold to the 40th percentile of weekly earnings; in 2013, this number would be $921/week or $47,892 per year and by 2016, could be $970/week or $50,440 per year.  As decision-makers and key personnel, it is imperative that you be aware that how you classify and compensate white collar employees.  This change could be a significant load on your payroll and tracking mechanisms if you do not take action immediately.

Speak with your payroll company immediately and if needed, engage the services of a firm who can perform an HR audit for you (we endorse the services of ETC HR).  We would love to help you as needed.  Simply give us a call  or contact us here to get started.

The complete NPRM website has additional information.