Under the new rules, salaried employees who earn less than $913 per week ($47,476 per year) will be eligible for overtime pay. That’s double the annual exempt amount of $455 per week ($23,660 per year) from previous rules.
In addition, the total annual pay for an exempt highly compensated employee is $134,004 (up from $100,000 previously). This new threshold will increase every three years beginning in 2020.
- Begin tracking hours for your salaried employees
- Review your payroll practices to determine the best options for your business
For employees who become eligible for overtime under these new rules, employers have a choice of three actions they can take:
- Pay time-and-a-half for overtime work
- Raise worker’s salaries above the new threshold
- Limit worker’s hours to 40 per week
In some cases, a business owner may find it cheaper to hire an additional part-time worker to handle work that now requires overtime hours.
You can find more about the new overtime law here.