This past month, the Department of Labor (DOL) proposed a change to overtime exemption regulations in response to a directive from the White House issued last year. The law—last updated in 2004—not only intends to adjust exclusion from overtime (currently exempts employees if they earn a minimum of $23,660 a year, or $455 each week), but would also increase the salary exemption to the 40th percentile of all weekly earnings among full-time, salaried employees (an estimated $970 a week), and raise the “highly compensated employees” exemption from the current $100,000 to $122,148. The proposed modified law would also call for businesses to implement sensible human resource solutions that deal with risks involved in noncompliance.
The DOL will be taking comments on the proposed change through September 4, 2015. Subsequently, the final ruling will be in effect 30-90 days after its enactment, if passed. It is always possible that the ruling may be rescinded or discarded because of a Congressional action. However, it may be likely that some update will be made to the regulations in the next few years, based on recent interest in the law.
This could affect small businesses where employees are eager to invest extra time in a project to help grow the business, but are compensated hourly. For businesses where this might be the case, business owners might want to consider how they will handle productivity and overtime, and if they will need additional resources. If and when the updated regulations are implemented, small businesses may need more money to hire more workers or pay more overtime. Whether your business needs funding now, or may need funding in the future you can learn more about different funding resources for your business at Access to Capital.
Photo Credit: Alan Cleaver, Flickr