Has your company addressed the new employee overtime rules?
The proposed change to overtime compensation has been on/off the table numerous times. When the Biden administration released the Fall 2022 Unified Agenda or Regulatory & Deregulatory Action, a new May 2023 publication date was released.
What is the current rule?
According to the CURRENT Fair Labor Standards Act (FLSA), employees must be paid an overtime premium of 1.5 times their regular rate of pay for all hours worked beyond 40 in a workweek. There are 3 exemptions to this requirement for administrative, executive and professional positions:
Be paid on a salary basis
Be paid at least the designated minimum weekly salary
Perform certain duties
The current salary threshold for these exempt positions is $684 a week ($35,568 annually). The proposed change would increase this rate to $900-1000 as week ($46,800-$52,000 annually).
What does this mean for your workforce?
Companies are advised to start reviewing job descriptions and time records. Decide what roles and duties may be eligible for this change as well as their exemption status. Make sure to include bonuses or incentive plans in those dollar amounts.
Don’t wait until the rule has already been enacted. SHRM has established a page with updates around these proposed changes.
This article is not meant for direct advice. Be sure to consult with your human resource department, provider, or accountant for guidance on reviewing how this applies to your workforce.