Everyone is somewhat familiar with the law that requires overtime to be paid to employees who work over 40 hours per week. However, the law exempts any employee employed in a bona fide executive, administrative, or professional capacity. This exemption is premised on the belief that these types of salaried employees generally earn higher salaries & enjoy other benefits.
Now, there is an exception to this exemption – if a person is a salaried employee and employed in an executive, administrative, or professional capacity, they will still be entitled to overtime under federal law if they earn a low salary. Currently, an employee in this category who earns less than $455/ week or $23,660 is entitled to overtime if they work more than 40 hours per week.
Starting December 1, 2016, these figures will increase over 100%. If an employee in this category earns less than $913/week or $47,476 per year, they will be entitled to overtime if they work over 40 hours per week.
While this is a dramatic increase, the law has not been changed in 12 years. With this new law, the minimum salary for this overtime change will be evaluated and possibly increased every 3 years.
If you are a business owner and employ employees who may be affected by the change in the new law, we encourage you to contact an attorney or other human resource professional to ensure you comply with the law.
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