New Overtime Rules for 2017

(Note: Shortly after this was published we found out that a federal judge overturned the ruling and now implementation has been delayed indefinitely. We leave the article here for now, so you can see the proposed changes.)

One of the most important changes for payroll administration in the United States is the new overtime rule that was created the U.S. Department of Labor and is due to take effect on December 1, 2016. Many companies that manage their own payroll administration have been hastening to determine how the new overtime rules will affect their employees and anticipation is that these changes will have wide-ranging effects on how payroll administration is handled throughout the rest of this year and into 2017.

The basic tenets of the new overtime rule are as follows:

  • Raising the salary threshold indicating eligibility from $455/week to $913 ($47,476 per year), ensuring protections to 4.2 million workers.
  • Automatically update the salary threshold every three years, based on wage growth over time, increasing predictability.
  • Strengthen overtime protections for salaried workers already entitled to overtime.
  • Provide greater clarity for workers and employers.

For employers, these changes to the overtime rule means that employers can offer the following changes to their employees:

  • Pay time-and-a-half for overtime work.
  • Raise workers’ salaries above the new threshold amounts.
  • Limit workers’ hours to 40 hours per week.
  • Some combination of the above

These changes to the overtime rule have raised a number of questions for both employers and employees, as many employers are attempting to determine if they need to lower workers’ hourly rates to offset any overtime pay that will be owed or if workers’ will be mandated to work a strict 8 hour day to avoid overtime pay. The expectations are that workers in retail and restaurant industries may see the most effect, but companies in the private sector, as well as government and non-profit organizations, may also feel the effects of the new law.

Currently there is an injunction blocking new Department of Labor regulations from going into effect as scheduled on Dec. 1, 2016

With many changes like this one it is important that your business stays current with the regulations. Finding an HR specialist that can answer all your Payroll questions can be difficult and  time consuming. Our professionals at EmployerNomics   will select the right PEO to answer all your HR Solutions questions and facilitate the changes so your business does not suffer. Get back to growing your company and let our professionals find the right match for you.

Please use the contact for below or call 407-490-2468 (or 800-788-8343 from a land line.) Options can be reviewed to insure proper employer coverage. But remember …

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