The Fair Labor Standards Act requires that employers pay their employees time and one-half their regular rate of pay for all hours worked in excess of 40 in a workweek.  In other words, employees are generally entitled to at least 50 percent greater pay for all hours worked per week after 40.  There are a number of exceptions to this current law, including exceptions for bona fide administrative, executive, and professional employees who earn a salary of $23,660 per year.  This law will dramatically change on December 1, 2016, the effective date of new U.S. Department of Labor regulations: the new salary threshold will be $47,476.  Penalties and liabilities for non-compliance are severe.

Some employers are already in the process of making changes to avoid having to make mandatory overtime payments–Walmart is reportedly raising the pay floor of some of its managers to $48,500.

In short, the number of workers eligible for overtime pay in the near future will dramatically increase.

Now is a very good time to review pay practices.  Do not assume, if you are an employer, that you have properly classified your employees as overtime exempt.  If you are an employee, do not assume that your employer has properly classified you.  Understand that, in order to be covered by the administrative, executive, and professional exemptions, an employee must have exempt work as his or her primary duty.

If you need assistance determining whether your company is (or will be) properly complying with overtime laws, or if you need assistance determining whether you have been properly paid by your employer for working more than 40 hours in a workweek, please contact me immediately.  If I cannot help you, I will do my best to connect you with somebody who can.

Matthew T. Kincaid