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Overtime Pay Rules: Avoid Making Costly Wrong Assumptions

The Department of Labor has come out with new salary and overtime rules effective December 1, 2016. These rules have the potential to disrupt your business and may increase labor costs if they are not appropriately understood and evaluated. Time is running out to evaluate and comply with these new rules. Below are some key highlights of the new overtime rules which increase the salary threshold for those employees who are eligible to receive overtime pay:

  1.  Sets the standard U.S. salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South ($913 per week; $47,476 annually for a full-year worker);
  2.  Sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test to the annual equivalent of the 90th percentile of full-time salaried workers nationally ($134,004); and
  3.  Establishes a mechanism for automatically updating the salary and compensation levels every three years to maintain the levels at the above percentiles and to ensure that they continue to provide useful and effective tests for exemption.

Some exceptions apply to these rules. Contact HHL Group, Inc. to set up a consultation regarding how to appropriately comply with these new overtime rules!


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