What do I need to know about the new overtime law?

Recently on our legal forum a user asked, “I have heard something about upcoming changes to the overtime laws. I am wondering what this means for me and other workers who make less than $40,000 per year?”

What is overtime pay?

According to current overtime laws, “Unless specifically exempted, employees covered by the FLSA must receive pay for hours worked in excess of 40 in a workweek at a rate not less than one and one-half their regular rates of pay. This is referred to as "overtime" pay.”

The President requested that the Department of Labor update and modernize the overtime regulations making them easier to understand and increasing the standard salary level at which an employee would be eligible to receive overtime pay (the current standard salary level is $455 per week or $23,660 annually for a full-year worker).

What are the changes to the overtime regulations for white collared salaried workers?

So what do you need to know about the new overtime regulations? The new overtime pay law increases the number of employees who will now qualify for overtime pay after they have worked their standard work week of 40 hours.

Specifically, if you are a salaried employee making less than $47,476 a year you must be paid overtime. The overtime pay threshold will also be updated once every three years, indexed to wage growth over time. The changes will be effective on December 1, 2016.

How will employers react to the new overtime laws?

The changes to the new overtime laws will expand overtime protection to an estimated 4.2 million workers. While this may be great for many employees, it has left employers scrambling to not only understand the new laws but also to figure out how the laws will affect their work force.

Business owners will have several options.

  • Keep employees at less than 40 hours per week, even if they were previously working more than 40 hours.
  • Increasing the salaries of those who are near the threshold so they will not qualify for overtime pay.
  • Converting certain salaried employees to hourly workers.
  • Pay time-and-a-half for all hours worked beyond 40 each week.

What do you need to do about the new overtime law?

If you work in a large organization with a human resource department they should be aware of the new regulations, how to legally comply with them, and what this means to their organization.  Employers who fail to comply with the new regulations could eventually be investigated by the Department of Labor.

You can also take some steps on your own to ensure that your employer follows the new laws. First, review information about the law on the Department of Labor website. Next, talk to your HR Department and ensure they have a plan. Discuss the new laws with your coworkers and your boss.

Finally, if come next year you are working and not receiving adequate compensation and overtime pay per the new overtime regulations you can talk to your employer or contact the Department of Labor for more information.

Filing an overtime pay claim against your employer

If your employer fails to pay you adequate overtime pay in some cases you may also be able to file a legal claim against them and recover damages for unpaid wages, interest on the unpaid wages, penalties for “waiting for pay”, and attorney’s fees.

Simple claims are generally initiated by filing a complaint with your state’s labor department. More complex cases, however, may require you to hire a labor attorney who understands federal labor and wage regulations.

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