A new employment overtime rule will require you to modify how you pay some of your full-time salaried employees, or you could end up facing expensive and time-consuming investigations into your labor compliance.
To ensure your practice is ready for compliance with the upcoming overtime rule, check out three facts about the law.
1. The Final Rule Is Expected This Year
The Department of Labor has proposed changes to the Fair Labor Standards Act (FLSA) overtime rule, but those adjustments haven’t yet been finalized, which means there’s no firm implementation date yet.
However, the terms of the final rule cleared White House review in April, so many analysts therefore believe the law will take effect by this summer.
2. The Law Will Change How You Pay Salaried Employees
Once the new overtime rule takes effect, practices could be required to pay overtime at 1.5 times a salaried staff member’s regular rate for all time they work beyond 40 hours a week as long as they make less than $55,068 a year. This is a significant change from the current cap, which only requires you to pay overtime if the salaried employee makes $35,568 or less.
Example: Suppose a salaried employee at your medical practice earns $54,000 annually. Under the current law, if that employee works 50 hours this week, you don’t have to pay them any additional pay. However, once the new overtime rule goes into effect, you’d have to pay that employee $389.40 extra on top of what they normally make. Here’s why:
- Their normal pay rate: $25.96
- $25.96 x 1.5: $38.94
- That hourly overtime rate multiplied by 10 hours of overtime: $389.40
3. The Overtime Salary Thresholds Will Change Every 3 Years
Once you get accustomed to the $55,068 threshold, you can’t quite count on it staying the same. Under the DOL rule, the salary threshold for which workers are entitled to overtime pay will change every three years. The government will base the changes on the earnings data it has at the time it makes the adjustment.
There’s so much more to know about the overtime rules you’ll soon be subject to, and you can’t afford to ignore the updates. Let healthcare attorney Ariel Fenster, Esq., help. During her online training, Comply With Fast Approaching Changes to Overtime Pay Rules, she’ll share the plain-English strategies you must employ to stay compliant. Register today!
Check out our Human Resources Playlist on YouTube for the latest expert advice, and subscribe to our YouTube channel for step-by-step guidance!
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