How Updates to the Overtime Exemption Rule Affect New York Businesses

Recently, the United States Department of Labor released the final updates to the Fair Labor Standards Act (FLSA), doubling the annual salary threshold from less than $23,660 to $47,476, under which most salaried employees fall. The update will extend overtime availability to 4.2 million workers to receive time-and-a-half wages for every hour they work beyond 40 hours a week.

The new regulation goes into effect December 1, 2016, and New York employers are left with few options to comply with the new protocols: raise workers’ salaries to maintain white collar exemption, pay current salaries with the time-and-a-half-wages for those who work more than 40 hours a week, reorganize workloads, adjust schedules and wages or spread out work hours.

To establish whether an employee qualifies for white collar exemption from the FSLA’s minimum wage and overtime requirements, an employer must assess how much the employee earns and whether the employee primarily performs the kind of job duties that Congress meant to exclude from the law’s time-and-a-half protection.

To qualify, an employee must be paid on a salary basis that is not subject to reduction based on the quality or quantity of work rather than on a hourly basis. The employee’s salary must meet the minimum salary level, which, after the effective date of the FLSA, will be $913 per week, equivalent to $47,476 annually for a full-year worker. The employee’s primary job duty must involve the kind of work associated with exempt executive, administrative, or professional employees. According to the U.S. Department of Labor, it is important to note that job titles never determine exemption status under FLSA and receiving a particular salary does not indicate that an employee is exempt from overtime and minimum wage protections.

Starting a business or continuing to have a successful company can be challenging because of ever-changing laws and regulations. Seeking the advice of an experienced business attorney will help business owners gain foresight into upcoming and current changes, as well as how to avoid common pitfalls. Contact the experienced New York business law attorneys at Blodnick, Fazio & Associates, P.C. for a free consultation by calling (516) 280-7105 or visiting www.bfandapc.com.

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