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    HR Administration | 1 min read

    The DOL's New Overtime Rule for Salaried Employees

    Business owners deal with many tasks when it comes to running their business and making it successful. Typical days involve handling sales, setting growth plans, hiring new employees, complying with new labor laws, and administering payroll, just to name a few. The constant is that change is inevitable in the business world. As a business owner, it is prudent that you remain up-to-date with the latest labor laws published by the Department of Labor (DOL) and, more importantly, you act swiftly to comply with any changes that may affect your business. Failing to do so can lead to costly financial penalties.

    With regard to the above, on Tuesday, May 17, 2016, President Obama announced at a White House press conference that the DOL will expand overtime pay to millions of Americans. The new rules raise the current overtime salary threshold from $23,660 to $47,476, guaranteeing overtime rights for salaried employees working more than 40 hours a week and that earn less than this new annual threshold. This magic number was chosen based on a public comment period and represents the earnings of the 40th percentile of salaried workers in the South, the lowest-income region. In addition, the DOL will update the threshold every three years to ensure it keeps up with the rate of inflation. It is estimated that more than 4 million workers will now qualify that were excluded.

    Typical businesses that will be most affected include restaurants, day care facilities, and manufacturers who employ managers and other salaried workers earning between $24,000 but less than $50,000 a year. According to The National Federation for Independent Business (NFIB), the new rules will affect 44% of small businesses and potentially affect 10 million workers. Some recommendations business owners can take to prepare for the new rules include updating timekeeping policies, conducting training, and executing a communications plan.

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    Norman Paul

    Norman Paul is CEO of SWBC PEO. He is responsible for overseeing the division’s day-to-day tasks, including payroll, employee benefits administration, workers’ compensation, and HR support for more than 14,000 shared employees in Texas and 40 additional states. Norman also serves as Corporate Counsel for SWBC PEO, providing guidance on compliance issues, overseeing unemployment claims administration, and conducting client training.

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