Did you know? US Fair Labor Standards Act
On May 18th, a major change to the US Fair Labor Standards Act was announced which is expected to affect around 4.2 million workers nationwide. Until recently, many employers were exempt from paying most “white collar” employees overtime pay if their yearly salary exceeded $23,666. The Obama administration has stated that the Federal salary threshold will be drastically increased to $47,476 and will continue to increase every 3 years with future inflation taken into account. The new threshold will go into effect starting December 1, 2016, which leaves many employers scrambling to come into compliance.
For those employees who are covered by the Fair Labor Standards Act; employers will need to decide the best way to proceed as they will have to:
• Increase salaries to exceed the new threshold.
• Limit work hours to 40 hours per week.
• Leave salaries the same and pay overtime.
• Reduce salaries and pay overtime.
If you think that these provisions may affect you as an employer or employee, the Department of Labor has a tool on their website to verify whether or not an employee is exempt from overtime pay under the Fair Labor Standards Act.
