(from our good friends at Thordsen Law Offices)
NEW FEDERAL OVERTIME LAW BEGINS DECEMBER 1, 2016
OVERTIME IS FOR ANYONE MAKING LESS THAN $47,476 PER YEAR.
THIS INCLUDES SALARIED EMPLOYEES
To be exempt from overtime one of the first parameters is that the employee must be paid a salary of a minimum amount. Under new changes to the overtime regulation, this minimum salary will be at least $913 per week (equivalent to $47,476 per year). Salaried white collar employees paid below this amount will generally be entitled to overtime. HOWEVER, THERE ARE CERTAIN CATEGORIES OF EMPLOYEES TO WHOM THIS MINIMUM SALARY DOES NOT APPLY, INCLUDING TEACHERS, LAWYERS OR DOCTORS.
Those employees paid above $913 per week can be exempt if they are employed as Executive Administrative or Professional employees. However, there are three tests to be met for the exemption from overtime to apply:
- The employee must be paid on a salary basis that is NOT SUBJECT TO REDUCTION based on quality or quantity of work. So if there is a chargeback to the employer from an investor it cannot be charged back to the employee salary as an example.
- The salary MUST MEET minimum salary level which after the effective date of December 1, 2016 is $913 per week equivalent to $47,476 annually for a full year worker.
- Primary job of the employee MUST involve the kind of work associated with exempt executive, administrative, or professional employees. (guidforprivempomnchanges 5-18-16 WHD-USDOL)
The above is a brief summary only. THIS MEANS THAT ALL EMPLOYEE CONTRACTS ANYONE IS USING MAY VIOLATE THE NEW LAW WHEN IT GOES INTO EFFECT ON DECEMBER `1, 2016. If you are using an employee contract (especially a written one) YOU WILL AND ABSOLUTELY SHOULD HAVE IT REVIEWED PRIOR TO DECEMBER 1 BECAUSE IT MAY BE INVALID AS OF THAT DATE. For those of you that have retained us over the years to prepare and/or review or revise employment contracts they will have to be updated BEFORE DECEMBER 1.
Thordsen Law Offices
(714) 662-4993 Direct Line