The SCORE 2016 Issue 3 | Page 40

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.