Have you talked to your employees yet about the OVERTIME law that changes on December 1?

Have you talked to your employees yet about the OVERTIME law that changes on December 1?  Yes, I am referring to the Department of Labor’s (“DOL”) new overtime rule that increases the overtime exemption threshold from $23,660 to $47,467 – nearly doublingthe previous threshold. Time is running out and I am afraid that most of you are ignoring the warnings. You need to listen because this new law affects all of you who have employees! The deadline to comply with the DOL’s new Fair Labor Standards Act regulations is exactly 17 days away. It’s time to get serious. You have had six months to prepare and these regulations are not going away anytime soon.

The word "overtime" seen through a magnifying glass


Most employers choose to pay an employee salary because its keeps things simple especially for those employees who don’t want to worry about tracking their time. Take note that to be salaried-exempt going forward, certain criteria is required:

  1. The employee must be paid on a regular salary basis, with the requirement that the pay not be reduced based on quality or quantity of work and must be paid even if no work is available.
  2. The salary must be no less than $47,476.
  3. The employee must also meet the required job duties under these 5 job categories: Executive, Professional, Computer, Administrative, and Outside Sales.


Another reason to take action now is because Utah law requires that employers give notice to an employee whose wages may be changed prior to the actual change. Thus, if you decide that a certain employees’ hourly will be reduced to compensate for the required overtime, you are obligated to notify the employee BEFORE December 1, 2016. Its time to have those conversations so your employees understand why you are changing their pay rate, or if you are requiring no more overtime. Each person will react differently and do not underestimate the value of communicating directly with each individual employee who will be affected by your changes.


Change opens the door to mistakes and legal action. As you make these changes and talk with your employees, make sure you document what you discussed, the date, and who was involved in the conversation. Arming yourself with correct and accessible records is one of the best ways to protect your business. Also, keep records of employees’ hours for at least 3 years in case a dispute arises. The statute of limitations is 2 years but the DOL can go back up to 3 years for willful violations.


Experts suggest that you do not wait until December 1st but actually implement this over Thanksgiving to avoid an administrative nightmare. Here’s why: This year, December 1 falls on a Thursday which means, if you make changes that same day, your reclassified employees will be exempt for half of the week, and nonexempt for the other half. Good luck processing payroll! However, due to the holiday, its unlikely newly classified employees will be working overtime that week, which can make the transition much easier and less expensive.

Check this post for more details about your obligations under this new law: http://www.danaballlaw.com/new-overtime-rule-applies/

I encourage you to act fast and heed these warnings!

My name is Dana Ball and I work with Small Businesses with less than 50 employees. I used to sue businesses for claims of breach of contract, sexual harassment, discrimination, wrongful termination, wage and hour, etc.   However, today I no longer sue companies, instead I help Small Businesses survive year after year by avoiding the common issues with Contracts and Employees. Small businesses need an attorney for the life of the business and at $100 an hour, I make it affordable for you to minimize and prevent legal nightmares. 


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