Employers are required to follow both local and federal employment laws, which means both should be considered when determining how to handle matters like employee benefits, pay, salary, or overtime. Specifically, there is a new federal law that employers should be aware of, particularly if they have lower salary employees. Learn more about this new law and how it could affect your business, and discover how an experienced employment law attorney can help get (or keep) your small business on track.

Low Salary Employees Now Paid Overtime

Known as the Fair Labor Standards Act, the new law is supposed to address the “eroding” 40-hour workweek and the millions of employees who are not compensated for their extra time. More specifically, the new law states that salaried employees who earn $47,500 or less are to be compensated for any overtime hours that they work. In addition, the threshold is expected to raise, yet again, by January 1, 2020 (to $51,000), and increase every three years thereafter.

If you have owned your business for any reasonable length of time, you have probably had to deal with some of the complexities of hiring a staff and compensating your workers in accordance with local, state, and federal regulations. Many of your employees—including many frontline customer-facing workers—are probably paid by the hour and are eligible to be paid overtime for every hour over 40 per week. Others, however—including management and other designated positions—may be exempt from federal overtime requirements, meaning they earn a specific salary per year.

Employers whose staff includes exempt employees must be prepared for upcoming changes set forth by the Obama administration and the Department of Labor. The regulations were announced this past spring and are set to take effect on December 1, 2016.

Criteria for Exempt Status