Major changes in overtime pay rules go into effect December 1. Are you ready to make adjustments to the way you classify and pay your employees?

What does the law do? The law raises the salary threshold for salaried, white-collar workers to be eligible for overtime pay for weeks in which the employees work more than 40 hours. Employees who earn less than $913 per week (or $47,476 annually) will become eligible to earn overtime. It also raises the salary level for “Highly Compensated Employees” who may not be eligible for overtime pay from $100,000 to $134,000.

What is not changing about the law? The “duties test” the Department of Labor uses to determine whether employees are exempt or non-exempt has not changed. Not only do employees need to meet the salary threshold.

Whom does the law affect? The Department of Labor estimates that the updated law will extend protections to 79,000 workers in Minnesota. Certain types of professionals (teachers, doctors, lawyers, outside salespeople, certain computer professionals) are not covered by these changes.

There are many exemptions and quirky twists and turns in the new rules. If you are unsure how your employees should be classified and paid, contact us.