The U.S. Department of Labor recently decided to increase the weekly salary threshold under which salaried workers are eligible for overtime pay when they work more than 40 hours per week.
This change will take effect on Dec. 1st. The minimum threshold will increase to $913/week (about $47,500 annually) from the current $455/week, (about $24,000 per year). This affects many small businesses so they should start preparing now.
Not many small businesses can simply increase salaries to meet the new minimum threshold.
We are seeing small businesses convert salaried workers under the minimum threshold to hourly workers. If these employees work overtime, their overall compensation will increase. Budgets need updated to reflect this to determine the effect on the company’s bottom line. Also, accurate records of time worked are necessary.
Please keep in mind, this includes work that might be performed outside normal business hours and out of the office. For example, responding to emails, texts, and phone calls count as time worked according to FLSA, as well as traveling.
