Many salaried employees are about to discover they’re entitled to overtime pay. On December 1st, the salary minimum for certain overtime exemptions is going to jump up from $455.00 per week ($23,660.00 per year) to $913.00 (or $47,476.00 annually).
The increased salary minimum applies to administrative, executive and professional employees (often called the “White Collar Exemptions”). Although these employee’s duties and responsibilities may not change, their exempt status will change to non-exempt, making them eligible for overtime compensation under the Fair Labor Standards Act.
The new salary limits will also change the overtime status for highly compensated employees. Currently, any employee making $100,000.00 per year who performs minimal administrative or executive duties is exempt from overtime pay. As of December 1st, that limit shoots up to $134,004.00 per year.
The new salary minimums are not a minimum wage. Instead, they are a limitation on the salary that certain white collar employees can be paid without being exempt from overtime. Exempt employees paid in excess of these limits will remain exempt.
The problem for businesses throughout the country is that many of them are not prepared for the new salary limits. Unless employers pay these newly nonexempt employees overtime, then the businesses may face immediate civil liability, including double damages and attorney’s fees.
There are a number of ways businesses can protect themselves, but time is short. Businesses have only thirty-five days left to take precautions against new overtime liability before the salary minimums go up. Now is a good time for businesses to prepare for the change.
If you are concerned about overtime liability, please contact our office today.
–Matt Allen, Associate
Employment and Labor Law Attorney