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New Overtime Pay Rule. Are You Prepared? Updated Information.

UPDATE 11/23/16  Federal Court Issues Injunction Halting Implementation of New Rule.

On Tuesday, November 22nd, U.S. District Judge Amos Mazzant of Sherman, TX issued a preliminary injunction against the Department of Labor’s new overtime pay rule that was set to go into effect on December 1st of this year.  According to the Wall Street Journal, Mazzant’s ruling effectively halts the implementation of the rule that would have increased the annual salary cap for overtime pay eligibility to $47,476 (from it’s current limit of $23,660). WSJ -Court Halts Overtime Rule

Many employers had already changed their pay policies to be in compliance with the new rule.  How this will effect those changes is anyone’s guess.  For the moment, it appears that the requirements for employers to pay time and a half for overtime will remain applicable only for those employees designated as non-exempt (hourly) employees, and exempt employees who earn less than $23,660.

We will be following this development closely over the coming weeks to better understand how it impacts our customers.  The blog posting below was written before the injunction was issued.

ORIGINAL POST FROM 11/22/16

Effective December 1, 2016, the Department of Labor’s new overtime pay rule goes into effect.  This will impact every employer in the country … especially employers in the Lehigh Valley.  In brief, the rule change significantly raises the annual salary limit under which an employee becomes eligible for overtime pay (from $23,660 to $47,476).

The new minimum salary has more than doubled!

What does this mean in practice?  First, if you have any exempt (salaried) employees earning less than $47,47stack-of-coins-with-clock6 per year, you will now be required to pay them at a rate of one and one half their regular rate of pay for all hours worked past 40 per week.  There  are no exceptions for the employees’ duties or role.

Second, since these employees have been paid a fixed salary and presumably were not required to report their time – now they have to.  So employers will need to initiate new time tracking processes (including recording when someone takes lunch).

There is detailed information on the Department of Labor’s website.  A link to the FAQ page for this rule is here: U.S. DOL Final Rule Updates Questions & Answers

Our customers are welcome to contact us to discuss how best to address this change and ensure their compliance.  Call Kevin Flemming directly at 610-433-3500 x707.

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