As outsourced general counsel to most of our clients, we have to often deal with internal employment matters for our client companies. Over the past years, overtime-pay related matters have been attracting more and more attention in a range of industries. Yesterday, on May 18, 2016 the revised Overtime Rules were released by the federal Department of Labor. The rules raise the minimum salary threshold for employees classified as “exempt” from the overtime pay requirements. The new rules go into effect on December 1, 2016 and provide, among other requirements, that:
In order to be considered exempt and ineligible for overtime wages under the “white collar” executive and administrative exemptions, most employees will need to be compensated on a salary basis of at least $913.00 per week (or $47,476.00 per year), in addition to the requirement that they perform certain delineated “exempt” duties and responsibilities. It is expected that this amount will be updated on January 1, 2020, and every three years thereafter. Non-discretionary bonuses, incentives and commissions that are paid quarterly or more frequently can count towards up to ten percent of this salary amount.
For employees to be classified as exempt under the “highly compensated exemption,” employees must actually receive a total annual compensation of at least $134,000.00 per year, and perform at least one exempt duty. If that amount is not actually received, for example because commission earnings were less than expected, an employer may bring the annual compensation to the required minimum within one month after the end of the year.
All employers irrespective of industries should be prepared to comply by December, potentially by raising salaries or by reclassifying employees as eligible for overtime pay (or non-exempt).
If you have any questions or concerns, please contact us. Our experienced team of attorneys will help you navigate the regulations to ensure that your employees are being properly classified and that your companies are in full compliance with the new Federal requirements.
At the turning of the calendar year, several laws affecting employers’ obligations changed, which are very important for those employers – especially small business owners – to be aware of, and comply with. Three such changes for 2015 include: wage reporting requirements; an increase in New York’s minimum wage; and exemptions from overtime pay for certain employees.
In the final days of 2014, Governor Cuomo signed a bill eliminating the wage notice requirement. Previously, employers were required to notify – and receive written acknowledgment from – every employee about their rate of pay, allowances, and pay day, amongst other information. Effective as of the new year, Governor Cuomo’s signature eliminated the Wage Theft Prevention Act’s reporting requirement, so employers need not expend energy and resources on this notification process.
The third change affects the salary minimum for the exemption from overtime pay. The “Executive or Administrative Exemption” exempts certain employees (such as bona fide executive, administrative, professional and outside sale employees) from overtime pay. To qualify for the exemption, an employee’s job duties and salary must meet certain requirements (an executive or administrative job title does not suffice). In New York, as of December 31, 2014, the minimum weekly salary for an employee to qualify for the exemption is $656.25; the federal standard is $455.00.
The change in calendar year generally correlates with implementation of new or amended legislation. It is important for business owners to be aware of these changes to avoid potential regulatory compliance issues.