The new overtime rule takes effect on December 1, 2016. Employers, are you ready? Employees, are you aware?
According to the Department of Labor as it relates to the new overtime rule update, “The updates will impact 4.2 million workers who will either gain new overtime protections or get a raise to the new salary threshold.” Essentially, “The rule increases the salary threshold below which most white-collar, salaried workers are entitled to overtime from the current $455 per week (or $23,660 for a full-year worker) to $913 per week (or $47,476 for a full-year worker).” In other words, once your threshold is reached, you are entitled to overtime pay. Intricate calculations for commissions, bonuses (discretionary/non-discretionary) further complicate the changes for employers prompting employers to explore options most beneficial to them and their respective affected employees.
Due to FLSA, compliance of this overtime rule is required for businesses with gross annual sales of $500,000 or more, or that are involved in interstate commerce.
Business requirements are ever-changing and keeping up with the slew of changes can be challenging and taxing. Speak to your CPA today and ensure that your business relationship encompasses compliance with the new overtime rule.