Be Prepared for New Overtime Rules in December!

Get ready for implementing the government’s new rules on overtime!  Companies that employ workers making below $50,000 will need to put in a bit of overtime just to make sure that they are compliant with the new federal guidelines.

The new ruling, which was announced on May 18th of this year, is due to go into effect on December 1st. What it means is that more than 4 million Americans will be eligible for overtime pay.   So those employees that are making less than 47,476 per year and work more than 40 hours a week or not – even if they are salaried, will be eligible to receive time-and-a-half pay for the hours that they work overtime.   The standard will be recalibrated every three years.

Companies that have employees in states with higher costs of living will likely not have to face these challenges with the new standards because they are already paying workers with  higher wages.  However, other companies may find themselves facing the challenge of what the ruling will mean to their overall bottom line.

Scott Bales, senior director of customer success at Replicon Inc., a time-keeping software company based in Calgary, Alberta, Canada, offers an explanation of the new rules.

According to the data that Replicon assembled, a small to medium sized business has on average 25.5 hours of overtime that they pay to workers than do workers who are employed by larger companies.

Bales suggests examining the type of work that is being completed during these extra hours and seeing whether or not they might be delegated to someone else to help reduce overhead costs.

After making such an examination, one option employers can take is to reclassify jobs as being nonexempt and pay for overtime hours worked.   This, Bales advised, is the easiest option.  His other suggestions can be found in the rest of the article at we are now in an election year, the new rules are unlikely going anywhere according to Bales.  If the new President happens to be against the rule,  it can be reversed because it is a presidential order, not legislation. Even so, it probably won’t be any time in the near future.

Government rules and regulations for employers are constantly changing.  The new rules for overtime don’t have to be a show stopper for your small to medium company.  At NetPEO, we can help you navigate through the new federal guidelines. We are committed to helping companies with all of their payroll needs. Give us a call to find out how.