Overtime Overhaul

Last Wednesday, May 18, 2016, the US Department of Labor provided some new rules that expand overtime pay eligibility for certain employees who aren’t currently required to get overtime. The rules become effective on December 1, 2016, and are estimated to impact over 9,000 South Dakotans. Do these rules apply to your business or employees?

Most employers are familiar with the requirement to pay certain workers time and a half for putting in OT. Certain salaried employees are also required to be paid overtime. The current rule requires that many salaried employees making less than $23,660 receive time and a half pay. The new rules nearly double that annual salary ceiling to $47,476. Employees under that new annual salary ceiling will require overtime pay after the rules go into effect. There are several exceptions to that rule. For example, most farmworkers are exempt.

Some salaried employees who make more than $47,476 are also required to receive extra pay. For these employees, the nature of their primary duties can make all the difference. The rules are complicated, and there are there no straightforward, hard-and-fast rules about who may or may not be exempt from overtime pay. The answer to the question of whether a salaried employee should get overtime pay depends on the facts and circumstances of each employee’s work situation.

Learn which of your employees need to get overtime pay

Don’t get surprised when the rule takes effect on December 1. Because the rules are complicated, the answer to which of your employees should get OT is not always easy to answer. Time is short before the new rules take effect. Consider contacting an attorney to determine which, if any, of your salaried employees will be required by federal law to receive additional pay.

Primary source: Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees, 81 Fed. Reg. 32391 (May 23, 2016) (PDF).