Small organizations have feared the impact of the new overtime rules which changed the level of pay below which everyone is considered eligible for overtime pay significantly. Many small businesses and non-profits assume they cannot afford to pay overtime. Others think anyone with a college degree is automatically exempt from overtime. The new rules have been announced and the salary level test is $913 per week ($47,476 annually.)
What are you going to do now?
The first step is to educate yourself. The US Department of Labor has a wide range of resources explaining the new rules and what has and has not changed. You can find this at DOL Final Overtime Rules 2016
I will be doing a webinar for the Virginia SBDC Network on June 24th which will focus on what options you have now and how to assess your next steps. Register for this free webinar via Webinar Info and Registration
Then move into assessing exactly what the impact is in your organization.
- Who is newly eligible?
- What are your options for each new eligible?
- How many hours does each person currently work over 40 on average?
- What are the reasons for overtime work?
- What are the costs associated with the possible changes you are considering? Timing?
If you have an annual pay review coming up this year, consider that date as well as the December 1 date – what does your culture imply you should do? What other impacts on your culture will this change lead to? What other impact will your culture have on your decisions?
Once you have a plan in place, you need to begin communicating with your employees. Although the rule changes do not take place until December 1, 2016, most employees will have heard something about them by now. Do not wait to communicate until later in the year – make your plan and start explaining it now.