Are You Prepared for the New FLSA Overtime Rule?

Posted on September 13, 2016

Payroll servicesIt isn’t news that the US Department of Labor has been working in recent months to protect more employees with an update to overtime standards under the Fair Labor Standards Act.  Starting December 1, 2016, nearly 42 million workers who are currently exempt from overtime pay will now be eligible. For those who make up to $47,476 a year, employers will be required to be pay overtime, even in the case of salaried professionals or managers. The department will adjust/increase the salary threshold every three years, the first update occurring the first of 2020.

You might be wondering what that means for your small business?

There is no doubt that this can cause quite a few complications and changes to your payroll in MA and NH. Employers must comply with these new rules, and it is important to prepare your books and employees for this change. This is especially significant for employees that will be making the transition from exempt to nonexempt, because for the first time in their careers with your company, they might have to track their work in and out of the office.

This can be an intricate process, especially if you have employees that are prone to and willing to check their work emails, work phones, and more outside of their workspace. It’s important to note that if you’re searching for a timely response from a nonexempt employee outside of the office, you are expected to provide compensation for that time.

It’s equally as vital to note the possible difference in benefits that might be offered to exempt and nonexempt employees. Commonly, there may be reduced benefits for nonexempt employees.  For those employees who switch statuses as a result of this new overtime rule, you must clearly communicate any changes to their compensation package.

Bookkeeping and record keeping are an essential part of this transition, as your payroll in MA and NH will see a significant difference in just a short time. Luckily, there are service providers out there like abc Payroll who are excited to work with your business and help you seamlessly shift into this new rule. With more questions about how we can help you, call us today at (978) 251-3003.

Are You Prepared for the New FLSA Overtime Rule?