Getting ready for new federal overtime regulations


NEW OVERTIME REGULATIONS are in the books in Washington, D.C., but they won’t be effective until Dec. 1, giving employers nationwide more than five months from now to prepare for them. The time will be needed; the regulations will affect almost every company, organization, and government agency from sea to shining sea and extend overtime protections to approximately 4.2 million middle-level salaried workers— 331,000 of them in Florida— who currently don’t qualify for OT.

From the U.S. Department of Labor (DOL) website (dol.gov/featured/overtime) we get the background and objective for the new overtime rules, which were announced in final form by the DOL on May 18.

“In 2014, President Obama directed the Secretary of Labor to update the overtime regulations to reflect the original intent of the Fair Labor Standards Act, and to simplify and modernize the rules so they’re easier for workers and businesses to understand and apply. The department has issued a final rule that will put more money in the pockets of middle-class workers— or give them more free time.”

According to the DOL, the final overtime rule (which has the weight of congressional law) will:

• Raise the salary threshold, indicating overtime eligibility, from $455 per week ($23,660 per year) to $913 per week ($47,476 per year). In other words, salaried employees making up to $47,476 per year will, effective Dec. 1, be eligible for overtime pay if they work more than 40 hours per week.

• Automatically update the salary threshold every three years, based on wage growth over time.

• Strengthen overtime protections for salaried workers already entitled to overtime.

• Provide greater clarity for workers and employers.

When President Obama issued his overtime directive in late June 2014, many government watchers at the time saw it as a move by the U.S. executive branch to boost middle-class incomes without congressional action.

The final rule does not make any changes to the duties test for executive, administrative, and professional employees. In response to the new overtime rule, the DOL says employers can:

• Pay time-and-a-half for overtime work.

• Raise workers’ salaries above the new threshold to avoid paying them overtime.

• Limit workers’ hours to 40 per week.

• Manage workers’ time and pay with some combination of the options above.

All employers are being urged to make sure their operations are in compliance with the new federal standards for and definitions of salaried exempt and non-exempt employees.

CREDIT

column by BAXTER TROUTMAN

BIO: Baxter Troutman is founder and chief executive officer of Labor Solutions, a staffing company with offices in Bartow, Winter Haven, Lake Wales, and Arcadia. A cattle rancher and citrus grower who served in the Florida House of Representatives, Troutman understands the challenges and concerns of today’s farmer.