How You Can Prepare for the New Overtime Rule Change

How You Can Prepare for the New Overtime Rule Change

There are new rules when it comes to employers, employees, and overtime—do you know what they are?

There are new rules and changes to the federal Fair Labor Standards Act (FLSA). Salary threshold for overtime exemption: it’s gone from $455 per week to $913 per week (or $23,660 annually to $47,476 annually). The bad news for employers is the doubling of overtime pay. There is, however, good news! (Isn’t there always?) It is less than the original proposed rate last fall of $50,440 annually. Also, there are no changes to the duties test, up to 10 percent of nondiscretionary bonuses can be included in the annual salary calculation, and the final rule has an effective date that has been extended to the 1st of December, 2016 to give employers more time to prepare for this new update. Here is how you can prepare financially for the new changes and rules to the overtime laws made by the FLSA.

How to Prepare Financially

  1. You can determine which employees are exempt at an annual pay rate of less than $47,476, including the 10 percent of nondiscretionary bonuses.
  2. Review with your managers the average hours that each employee works over 40 hours that may trigger overtime eligibility. Don’t forget to include meal and rest periods, along with travel time, training time, and other hidden overtime in that analysis.
  3. Consider raising the employees’ pay to meet the new threshold or budget for potential additional overtime expenses with the reclassification to nonexempt status.

It’s important to know how these new overtime rules will affect your business, and how it will affect your budget. For information on how these changes to overtime pay will affect nonprofit organization around the country contact the experts at Colorado Nonprofit Insurance Agency in Denver, Colorado. We will work with you to ensure you are getting the most out of your coverage.