New Overtime Laws

New Overtime Laws

Who here loves overtime? Most people would be raising their hands right about now, unless they work off a salary based paycheck that is. When you work a job that pages you an hourly wage, your maximum workweek is 40 hours. Anything past 40 hours that you work becomes overtime, which pays time and a half. This means for every hour you work over 40, you get paid your normal wage, plus half your normal wage added on top of it. In contrast, a salary worker is paid the same amount of money each week, no matter how many hours they work. One week they can work 30 hours and get paid $500, and the next week work 50 hours and still make $500.

There is a way for an salary worker to get overtime however. If they make less than $23,000 a year on their salary, than they are owed overtime pay for their work. To break it down, a salary employee has to get paid more than $455 a week, or get paid for overtime. This may seem significant, yet many of the jobs that employ salaried workers cross this threshold. This creates one very significant problem for many people who get paid on salary however. Depending on the workload, salaried workers might actually be making less than minimum wage for their work. For some business positions, the job never ends. During a busy season, some people might work so many hours, that when spread out, come to less than the state approved minimum wage.

The problem there is pretty clear, we need to reconfigure the our overtime laws so that salary workers get paid what they are really worth. Starting in December, that is exactly what President Obama plans to do. A change to salary and overtime laws has already been created, and will take effect December 1st, 2016. Under the new salary laws, any salary worker making less than $47,476 a year will now qualify for overtime. Breaking this number down means an employee must make $913 a week, or get paid for any overtime they work. This new system will have a few possible beneficial outcomes for people who are paid salary, benefits such as:

• Pay Raise: Instead of paying overtime, an employee paid on salary might get a pay raise over the new threshold.
• Paid Overtime: Or, the opposite may happen, and instead of a pay raise, will get overtime pay for their long hours at the office.
• Less Work: A salary worker will make the same base level regardless of how much work they do, so to avoid giving one worker too much overtime, his work load might be broken up among other employees, giving them more free time without a cut in pay.

 

If you are worried about how this new law will affect you, you still have time to make changes in your company to prepare for it. For a better understanding and integration, hire a company like Vision H.R. that has years of experience handling their clients payroll not just by making sure it runs smoothly, but by also making sure it stays up to date by following new laws and regulations when they are created. If you are thinking of outsourcing your payroll to help keep it up to date, the first step is absolutely free. All you have to do is visit www.Vision-hr.com to get a free quote for your business. Get started now, and by the time December 1st comes around, you’re company will already be up to date on the new change.