New Overtime Rules May Be Just Around the Corner
Texas business owners are waiting to see if the Obama administration will follow through on recent promises to change overtime rules. Specifically, he wants to raise the national income threshold which helps define which employees are salaried and which employees are eligible for overtime pay.
Salaried versus hourly employees
The advantage for an employer classifying an employee as salaried is obvious — salaried employees make a fixed amount per pay period, exclusive of any applicable bonuses. Salaried employees are not eligible for overtime pay, regardless how many hours in excess of 40 they work per week.
Under the current rules, employers can classify employees as salaried employees if they make wages greater than a certain threshold amount per week and their jobs include managerial or supervisory duties, with some exceptions.
Proposed changes include increasing the minimum pay a salaried worker can earn
The current threshold amount is $455.00 per week. This means if an employee makes less than $455.00 per week, the employee cannot be classified as salaried, and thus cannot be exempt from earning overtime pay for hours worked in excess of 40 hours per week, even if the employee's job includes managerial and supervisory duties.
The Obama administration plans to raise the threshold amount, in an effort to give more formerly ‘salaried' employees a chance to earn overtime pay. There is also talk of implementing a requirement that the supervisory or managerial duties have to play a significant role in the employee's job for the employee to be exempt from overtime. (Currently, an employee who supervises other employees only five percent of the time may still be classified as a salaried employee.)
Keep an eye on proposed changes when planning
Of course, these kinds of changes take time to get approved and even more time to implement. Nevertheless, employers should take these prospective amendments into account when planning for companies' future needs.
For legal advice about starting or managing your business, or complying with employment and other regulatory restrictions, contact an experienced Bryan-College Station, Texas business law attorney. Our attorneys are here to answer your legal business management questions so you can focus on growing your business. Call the Peterson Law Group to make an appointment at 979-703-7014 or fill out our online contact form.
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