It may not be a increase in the minimum wage, but a federal rule set to go in to effect in December 2016 will cost Connecticut employers millions in new overtime pay. The rule impacts the fair labor standards act (FLSA) and increases the amount of employees who are eligible for mandatory overtime pay. Under the old rule, salaried employees earning approximately $24,000 per year were exempt from overtime pay. Under the new rule, any employee who is paid less than $47,476 per year is eligible for overtime pay for any hours worked over 40 hours per week. The new rule also impacts many highly compensated employees. Again, under the old rule employees her who earned over $100,000 per year had to show that they were not executive type jobs in order to be eligible for mandatory overtime pay. The new rule raises that level to $134,000 per year. So how many employees are going to be affected? According to the federal Department of Labor approximately 4.2 million workers in the United States are likely to be impacted by the mandatory overtime rules. So what’s the bottom line? Employers who rely on the salary exemption for paying over time need to carefully consider their compensation practices. The new rule is published in 81 CFR 32391, et seq.
If you need help understanding these rules, or have any other employment related issues, please feel free to contact Connecticut employment attorney Andrew Magwood at 860-373-2386.