Is YOUR Business affected by the new Overtime Rules?     Are you up to speed on the new overtime regulations that went into effect last week?  If your company earns more than $500,000 in gross revenue, you’ll need to understand the new rules under the Fair Labor Standards Act (FLSA) for overtime pay.   The FLSA requires that most employees are to be paid minimum wage for hours worked up to 40 in a work week.  Upon working more than 40 hours a week, employees are to be compensated at a rate of 1.5 times their regular rate of pay.    As of August 23, employees earning less than $455 per week ($23,660 per year) are eligible to receive overtime pay when they work over 40 hours in a work week regardless of the employee’s classification.  So called "blue collar" workers performing repetitive operations with their hands, physical skill, and energy are explicitly NEVER exempted from overtime pay regardless of their weekly pay rate.   Employees classified as “Exempt Employees” and earning more than $23,660 per year do not fall under the overtime regulations.   Exemptions exist for so called “white collar” employees who are properly classified in one of the following groups:   executive, with primary duties of management, supervision of two of more employees, and the authority to make hiring, firing, advancement, and promotion changes or suggestions; administrative, with primary duties of performing office work related to management, operations of the employer or customers, and the exercise of discretion and independent judgment; learned professional, with primary duties requiring advanced knowledge (work predominantly intellectual in character and requires the consistent exercise of discretion and judgment) in the field of science or learning and acquired by a prolonged specialized instruction course; creative professional, with the primary duty of work requiring invention, imagination, originality, or talent in an artistic or creative endeavor; outside sales, with the primary duty of making sales or obtaining orders or contracts for services while outside the employer’s business location; certain computer, including computer systems analysts, computer programmers, software engineers, or other similarly skilled worker with the primary duties of applying systems analysis techniques and procedures; and the design, development, documentation, analysis, creation, testing or modification of computer systems or programs including prototypes and those related to machine operating systems; and highly compensated, defined as employees paid total annual compensation of $100,000 or more if they perform at least one of the duties of an exempt executive, administrative, or professional employee. Generally, employees in the abovementioned categories may qualify for exemption on the basis of their salary and job duties performed.  Click on the above links to be directed to the Department of Labor website containing exemption specifics, including job duties for each category.

Hourly Labor Stats:    The minimum salary level was last updated in 1975 and was only $155 per week.    6.7 million workers are now eligible for overtime pay.    2.6 million workers are expected to be affected by the new rules    The current minimum wage rate is $5.15 per hour.   For additional information, check out the following web sites:   US Department of Labor: www.dol.gov/fairpay   Society for Human Resources Management: www.shrm.org     Check out our payroll deduction calculator on our website under tax calculators or click here.     The content of this transmission does not constitute a professional service. Always consult with a competent professional service provider for advice on tax, accounting, and other financial matters specific to your situation. If you wish to engage our firm for this purpose, please contact our office.