Is Your Business Ready for the New Overtime Rules?

Written by promotiondept

September 24, 2018

Last Updated: Jan 5, 2017
The new overtime rule is about to go into effect. Many small businesses that never had to worry about nonexempt employees will now be faced with the issue. Is your business prepared? Here’s what you need to know about the new overtime exemption rules.

Big company, small company, lots of employees, or one employee, your HR load is about to mp up. That’s because new overtime take effect on December 1, 2016. For any employee that makes less than $47,476 per year, they can no longer be labeled as exempt from overtime. More bluntly—if you have any working for you below that pay threshold, you probably have to pay them overtime after 40 hours of work.

Let’s jump back for a momt and explain a few of the not-so-clear s that you as a business must comply with if you hire employees. If you’re looking for some light reading to cure your nighttime bout with insomnia look no further than the Fair Labor Standards Act or FLSA. This is the set of s that governs how you pay your employees.

It includes things like minimum wage, the fact that you have to pay workers on a regular payday, and all of those deductions that you take from your employees’ checks.

The FLSA does not cover things like vacation, holiday, sick or sevence pay, holiday hours, special weekd wages, fringe befits or discharge pctices. All of these ite are covered in your employmt contct.

RELATED: New Overtime Rule’s Effect on Small Businesses

And yes, the FLSA does dictate overtime pay. In the past, if your employees were hourly, (also called non-exempt) you had to pay overtime pay for more than 40 hours of work. But there were exceptions to this overtime pay rule. You could be an exempt employee if you were a teacher or an administtor in a school, outside sales rep, and certain computer related occupations. Seasonal employees like fisherman, paper dey workers, some farmworkers, and babysitters or people who d for the elderly in a casual capacity. Finally, if you were paid less than $23,660 you could not be considered exempt. There were all kinds of workarounds employers could use to classify employees as exempt but now, the pay threshold overshadows almost all of those workarounds.

There are many more highly complicated rules for ating employees as exempt or non-exempt that hav’t changed but the pay threshold more than doubling from $23k to $47,476 means back to hourly wages ther than a salary—something that has tditionally meant a more professional status.

What does the change look like in more pctical ter? First, back to the days of timecards. The modern day equivalt are online platfor that allow for clocking in and out on a mobile app but the idea is the same. Your employees have to be detailed with it. If they worked until 11:30 at night getting ready for a sales call the next morning, they have to clock the hours. If they took 45 minutes for lunch, they have to clock it. If they don’t, you are in violation of the . If they reach their 40 hours on Thursday, they can’t work Friday unless you pay for the overtime.

Second, if you’re like most small businesses, you allow your employees to work irregular hours as long as they get their work done with excellce and on time. Under the new system, the more employees you have, the harder it will be to allow them to come and go as needed. You’ll likely find it easier to hold them to set hours.

Along the same lines, you’ll probably be less thusiastic about telecommuting. Wh hours wer’t tcked you wer’t as concerned about the amount of work they got done in an hour because if they’re working from home, they’ll work until the project is done.

Not under the new system. Now, every hour is important because you have to pay overtime ev if they ar’t as productive a certain day.

How Will You Pay Overtime?

Employees’ gut reaction was to be excited about the change but there’s a problem. They’re not going to be paid for overtime; they just won’t get it because businesses don’t have the ext money. The National Retail Fedetion said the same thing in a press release. If that’s you, you will likely feel the push to micromanage more so employees get more done in the 40 hours they have each week.

No Special Deals

Under FSLA, some things you can negotiate but you can’t skirt the new by negotiating with your employees. There’s a workaround, of course. If you have an employee that’s close to the $47,476 threshold that regularly works overtime, give them a ise. The pay bump might be cheaper than paying overtime hours or hiring another employee to take on their overtime workload.

The Ironic Part

If all of these new rules have you a little down in the dumps, there’s a bit of irony to it. , made up of the people who passed the , might have forgott that many of their employees are working a huge amount of overtime hours without pay. They, too, will fall under the new rules and most ional offices don’t have the money to compsate their staffers. And some m aren’t too happy about it.

is allowed to exempt theelves from the rule but ev they know that doing so could be political suicide.

What’s not funny is that many ional workers are young budding politicians theelves who are willing to work the ext hours to get a er boost. Under the new s, that won’t be easy to do anymore.

The isn’t likely to change before going into effect so start putting together a sttegy that works for your business. And if you’re a sole proprietorship, celebte because none of this applies to you.

© 2016 Attard Communications, Inc. All Rights Reserved. May not be reproduced, reprinted or redistributed without writt permission from Attard Communications, Inc.



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