More Workers May Become Eligible for Overtime

Do you currently have employees who are salaried and exempt from overtime according to federal guidelines? Are you aware that the laws regarding who would be exempt from overtime may be changing? The U.S. Department of Labor may raise the minimum salary for exempting employees who work more than 40 hours per week and meet the additional qualifications.

Currently federal law states that a worker must be paid at least $455 per week ($23,600 annually), be paid on a salary basis, and perform exempt job duties which include administrative, executive, computer testing/programming, creative (acting, etc) or professional duties to avoid being paid for overtime if working more than 40 hours in a week. The Fair Labor Standards Act (FSLA) sets forth the overtime guidelines for minimum wage, overtime and employment standards.

According to information released by Reuters, Washington is considering raising the minimum salary to $970 per week (more than double the current rate) or $50,440 per year. According to Ross Eisenbrey, Vice President of Economic Policy Institute, this could affect more than 15 million workers.

With increasing payroll costs in many states including mandatory sick pay in California, increased minimum wages, and the additional payroll tax and worker’s compensation insurance that is affected by payroll increases, this may be another nail in the coffin of small business owners and their capability to remain profitable.

This law will not affect your business if you do not have salaried exempt employees, but it will definitely hurt those who do have managers or workers in other currently exempt categories. The minimum rate of pay to qualify for this exemption would be $24.25 if this change goes into effect.

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