1. Making Sense of Overtime Law Changes
Katie Magoon

2. Pop Quiz Does the # of employees matter? Are non-profits covered?
Does this include the office manager?
Do commissions count?
Are school districts covered?

3. Fair Labor Standards Act?
Law which governs:
Overtime pay requirements
Minimum wages
Child labor laws
Record keeping

4. Who is eligible today?
All employees are eligible for overtime pay unless they meet all three of these criteria:
Salary > $455/week or $23,500/year
job duties under “exempt” categories
salary vs hourly

5. Confused?
Exempt vs Non-Exempt

6. Confused? Exempt Meet all 3 criteria OT NOT required
“Because they meet the criteria, they are exempt from the law requiring OT pay”
Non-exempt
1 or more criteria are not met
OT is required
“Because they do NOT meet the criteria, they are NOT exempt from the law and must be paid OT.”

7. What’s new?
All employees are eligible for overtime pay unless they meet all three of these criteria:
Salary > $913/week or $47,476/year
job duties under “exempt” categories
salary vs hourly

8. Do commissions count?

9. Do commissions count? Outside sales position? Yes? No? No OT required
Paid minimum quarterly?
Bonuses & Commission do not count!
No OT required
Count up to $4,756

10. Pop Quiz OT required? Inside Sales Rep
$43,500/yr + $4,000 commission (paid mthly)
$35,000 + $15,000 commission (paid mthly)
No OT required!
OT required!

11. Pop Quiz OT required? Restaurant Manager
$40,000/yr + $10,000/yr in tips
Website Developer
$44,000 + Christmas bonus $5000
OT required!
OT required!

12. Is salary all that matters?
Job duties!

13. Job duties test?
Roles must fall under 1 of these 7 categories to be exempt:
Executive
Administrative
Professional
Creative Professional Employee
Computer Employee
Outside Sales
Highly Compensated

14. Avoiding Errors Do NOT assume! Look beyond job title
Complete job duties tests
Accurate job descriptions

15. Options for Compliance
Increase annual salary
Pay overtime over 40 hrs/wk
Limit # of hrs/wk
Reduce hourly rate, pay OT

16. Options for Compliance
Consider alternate staffing options
Temporary or contract staff
Reassign responsibilities
Supplement part-time staff
Bonus or commission plans

17. What if I don’t comply? Legal ramifications: Back pay + interest
“Willful” = $10,000 + up to $1,100/violation
Prison?
Culture ramifications:
Turnover
Disengagement
Union campaigns

18. What do I do now? Apply salary tests Review job duties test
Select strategy for compliance
Create change management plan
Update job descriptions
Deadline – December 1, 2016

19. How can we help? Write job descriptions Complete job duties review
Consult on change management

20. Need Help?
Katie Magoon
(314)

21. What do these mean? Executive:
customarily directs the work of at least 2 or more full-time employees
authority to hire and fire
Administrative:
performance of office or non-manual work
exercises discretion and independent judgment w/matters of significance
Includes HR professional, Marketing Specialist
Typically not Administrative Assistant
Professional:
Work require advanced knowledge in a field of science or learning
Requires prolonged course of specialized instruction
Example: Chemist or Professor

22. What do these mean? Creative Professional Employee:
Work requiring invention, imagination, originality or talent
Includes graphic designer, copywriter, website developer
Computer Employee:
Works as computer systems analyst, programmer, software engineer or similar work in the computer field
Outside Sales:
Primary duty of making sales or obtaining orders
Must be regularly engaged away from office
Highly Compensated:
Performs office or non-manual work
Performs at least one the duties under executive, administrative or professional exemptions
Makes a minimum of $100,000