ARE YOU PREPARED
FOR THE
NEW OVERTIME RULES?
By Stacy Smith, CPA
2016 Issue 3 |
THE
SCORE
38
T
he new overtime rules issued by the Department of
Labor (DOL) will soon be in effect. Beginning Dec.
1 of this year, the new salary threshold to avoid
paying overtime will increase from $455 per week
to $913 (an annual salary of $47,476). Although the DOL has
given businesses about 180 days to be in compliance with the
new rules, some employers are still struggling to overhaul
their compensation programs.
What works for one business may not work for another.
Some might decide that raising salaries above the threshold
is better than tracking hours and paying overtime. Others
might choose to limit workers to 40
hours and hire additional staff to fill in
as needed. A slightly more contentious
alternative would be to reclassify workers
as nonexempt and pay the overtime,
but cut base salaries or other benefits to
compensate. This option has the appeal of being relatively
cost neutral but is more complex, leaving employers feeling
overwhelmed. To help in this process, below are several
considerations to keep in mind as you bring your organization into compliance.