If you’ve been watching the news or reading workplace blogs, you’ve probably heard a lot of buzz about the new overtime rules. This ruling goes into effect January 1st and raises the minimum salary needed to avoid paying employees overtime.
With the the old rules, employees making under $23,660 annually needed to be paid overtime for any hours worked over 40 each week. Under the new rule, this salary is raised to $35,308.
What does this mean for employers? First, any employees classified as exempt but paid under $35,308 need to be paid overtime for all hours worked over 40. This means that if these employees aren’t recording their time, they’ll need to do so starting in the new year.
Alternatively, employers can raise salaries for those under the threshold to keep them classified as exempt and avoid paying overtime or tracking their hours.
So so what’s the best route? It depends on the employer. Some may be willing to pay overtime and have their employees start tracking their hours. After all, who wouldn't want extra money? However, it’s important to realize hat this may have the opposite effect on employee morale. Many employees view exempt status and not having to record hours as an achievement in their career and may resent having their hours monitored. It may be worthwhile to increase their salary rather than reclassify them. Each employer should carefully weight the pros and cons prior to making a decision.
Want to read more? Visit https://www.dol.gov/agencies/whd/overtime/2019
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