Recently a new overtime rule was passed. Currently, salaried employees making less than $23,660 are eligible for overtime pay IF they work more than 40 hours in a week. That amount is being raised to $47,476, effective December 1st, 2016.
This will be a big adjustment for small business owners and they will have some tough decisions to make regarding salaried employees making less than $47,476.
What can you do?
- You can simply pay those employees time-and-a-half for all hours worked beyond 40 each week
- Scale back their hours to just 40 per week and still pay the same salary
- Give the employee a raise to $47,476 or above so they can continue working more than 40 hours per week without overtime pay
You can also use any combination of the three options.
You will not be the only business owner impacted. In fact, 4.2 million employees will be affected, which means your business could be impacted as well.
It is not time to panic, however, it is time to make some decisions. Have you looked at your options? Do you have the correct systems in place to handle those options? What will be your best cost benefit?
I would recommend talking to your payroll company or your accountant to make the best decision for you and your employees.
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