New FLSA Requirements

New overtime regulations under FLSA will go into effect on December 1, 2016.   The salary floor for FLSA exemptions will be raised to $913 per week or $47,476 annually.  In order to still be considered exempt, employees will need to earn a salary above $47,476.  Salaries below the $47,476 will be reclassified as non-exempt and then be subject to the overtime, meal and rest breaks, and other protections in the FLSA.
 
The exempt vs. non-exempt status refers to an employee’s eligibility for overtime pay.
Non-exempt employees are typically paid hourly and are expected to be paid overtime wages.
Exempt employees are generally paid a salary and do not receive overtime pay
 
In other words, exempt employees who do not meet the new salary threshold of $47,760/year will become non-exempt and entitled to overtime. While exempt employees are not required to keep track of their hours, non-exempt employees must track their “hours worked” and be paid overtime for all hours worked in excess of 40 in a workweek.
 
Once an exempt employee is re-classified as non-exempt, all of his/her work time must be reported and paid, including overtime. Employers who re-classify exempt employees must ensure that the employees are accurately recording and being paid for their time and not working “off the clock.”
 
This new FLSA ruling applies only to for-profit employers whose annual sales total $500,000 or more or who are engaged in interstate commerce.  You might think that this would restrict the FLSA to covering only employees in large companies, but, in reality, the law covers nearly all workplaces. This is because the courts have interpreted the term “interstate commerce” very broadly. For example, courts have ruled that companies that regularly use the U.S. mail to send or receive letters to and from other states are engaged in interstate commerce. Even the fact that employees use company telephones or computers to place or accept interstate business calls or take orders has subjected an employer to the FLSA.
 
If you have any questions or concerns regarding these new requirements, please let us know!