The US Department of Labor changed the rules for determining overtime eligibility. Beginning in December 2016, the salary threshold for exempt "white collar" employees will increase from $23,660 to $47,476 per year. This means that if any employee earns less than the new threshold, their employer will have to pay them overtime (1.5 times their regular pay rate) for any hours worked over 40 in a week. It is estimated that over 4 million additional workers will now qualify for overtime pay due to this rule change. Employers have three options to comply with the new rules: raise salaries above the threshold; adjust base pay downward while maintaining the same total pay; or change pay structures to hourly for affected employees. All

1. 8 I c e W o r l d J o u r n a l
Ice World Journal
New Overtime Rules – What You Need to Know
May 19, 2016 | By Chris Massey
Category: Compliance
On Wednesday, the US Department of
Labor changed the rules determining
who is eligible for overtime, a change
that will affect virtually every business in
the country.
Under current law, if a salaried employee
performing certain “white collar”job
functions earns more than $23,660 a year
and works more than 40 hours a week,
they are not legally entitled to overtime
pay, which is 1.5 times the employee’s
regular rate of pay.
Beginning Dec. 1, 2016, that salary
threshold will increase to $47,476 a
year ($913 per week).That means if any
worker in your business or organization
– regardless of role or title – earns less
than that amount in a year, then they will
have to track their hours and you will
have to pay them time-and-a-half if they
work more than 40 hours in a week. Just
remember, not all jobs are exempt from
overtime, even if you pay an employee
more than minimum salary threshold.
With this rule change, it is estimated that
at least 4.2 million workers will now be
eligible for overtime pay.
For employers, you essentially have three
options:
You can raise salaries for “white collar”
employees above the $47,476 threshold
so that they will be exempt from over-
time.
You can adjust base pay downward so
that, if the employee works the same
number of hours as before, the employee
will get the same total compensation as
before. Note that if the employee actu-
ally works more or fewer hours than you
estimated, they will make more or less
money than before.
Or you can change the pay structure for
those below the threshold entirely to be
pure hourly work.
Whatever you choose, one thing is
clear: you will have to track the hours of
all employees who make less than the
threshold, and accurately pay them for
their work.