Last quarter President Obama made a dramatic change to how some salary workers will be paid. In years past, employees who acted as supervisors or managers had the responsibility of making financial decisions, overseeing employees, delegating tasks, among other many other duties; and more often than not worked well over 40 hours per week with no overtime pay.
Businesses that have operated under this regulation will soon have to make changes. As it stands, the salary limit exemption concerning overtime for white collar workers is $455 per week or $23,660 per year. In the near future, businesses across the country will have to make a major adjustment. As soon as next year, the new salary exemption for workers will move to about $970 a week or $50,440 a year.
This regulation will come into effect and businesses will have to alter not only the workload, but also how workers are paid.
So what does this mean for small businesses?
Some companies won’t suffer financially, however, this won’t be the case for every business.
If companies don’t make staff changes they will pay time and half for those that fall below the designated threshold.
The new regulation could mean:
– employers cut back on hours for employees in supervisory and managerial positions and give remaining hours to part time employees
– salaried employees may be put into hourly positions
– new part time and full time positions could become available (new hires)
Businesses must get prepared for a definite shift within their company. This is a general overview of how the new regulation will work. Be sure to get the specifics from the United States Department of Labor to understand the full scope. If you need additional help determining the best move for your business, refer to your HR professional for assistance. This change is inevitable so don’t hesitate, start preparing now.