Ticktin Minute August 15, 2016 – Important New Changes to the Employee Overtime Compensation Rules

Important New Changes to the Employee Overtime Compensation Rules

Important new changes to the employee overtime compensation rules will become effective later this year. The Florida Department of Labor, pursuant to changes to the Fair Labor Standards Act, issued new overtime regulations employers must follow for certain salaried employees. These regulations will go into effect on December 1, 2016 and will affect hundreds of thousands of workers in the State of Florida.

As a brief overview, the previous law (current law) on employee overtime compensation states that most salaried employees are not entitled to compensation for overtime performed outside of their regular forty (40) hour week, unless that employee meets the “salary basis test.” Specifically, workers receiving more than $23,660.00 per year are considered exempt employees who are not entitled to overtime pay. With the new overtime rules, workers making more than $47,476.00 will be considered exempt employees. The minimum salary requirement (salary basis test) for exemption was increased by nearly $25,000.00. This threshold is based on the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, which is currently the South.

Further, certain categories of employees are excluded from the “salary basis test.” One such category includes professionals, such as lawyers. However, managers will now have to make at least $47,476.00 in order to remain exempt from overtime compensation requirements. One way an employer can ensure that an employee (such as a manager) remains exempt is to raise their salary to $47,476.00. However, this may not be financially feasible in all cases. There are other alternatives on a case-by-case basis.

Finally, the new rule will be in effect for three (3) years. In year 2020, the overtime regulations may stay the same or may be revised in accordance with the economy and job statistics at that time.

If you have any questions regarding the new rules, then you should contact the attorneys of The Ticktin Law Group for a free consultation to determine your rights and/or obligations under the new law.