Starting December 1, 2016, the $23,660 threshold will more than double to $47,476 annually or $913 a week. This change means any employee in your business that makes under the $47,476 annual threshold will have to have their hours tracked to pay employees accurately for going over 40 hours a week. With this change, the Department of Labor estimated 4.2 million workers will now be eligible for overtime pay.
How will this affect employers? Essentially, you will have three options on how to handle the change. First, an employer can raise employees’ salaries above the $47,476 threshold. Making them ineligible for overtime. The next option is to lower the base pay for employees. This way when an employee works the same number of hours, as before the rule change, they will earn the same compensation. The last option is to change the pay structure for employees below the threshold to hourly work.
Below is a Video on the Department of Labor website that also explains the changes and options for employers.
However you end up choosing to combat this change, it is clear that you will have to track all salaried employees’ hours that do not make over $47,476.
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