Changes to Overtime Pay

Changes to Overtime Pay

Effective December 1, 2016, an employee is exempt from overtime pay if he or she meets certain tests regarding the employee’s duties and is paid on a salary basis that is not less than $970 a week ($50,440 per year).

What Should Employers Do?

Employers should identify employees who may need a salary increase or be reclassified; develop a new compensation plan for the reclassified employees; review wage-hour policies and processes; communicate the changes to employees; train the reclassified employees and their managers.

When reviewing whether an employee is meeting the required minimum salary basis, the employer may take into account nondiscretionary bonuses and incentive payments and commissions, provided they are paid at least quarterly. Such nondiscretionary pay may only satisfy up to 10% of the minimum salary requirement.

All appropriate changes should be determined and communicated before December 1, 2016.

Laura M. Trujillo


Disclaimer: This blog is for information purposes only. Legal advice is provided only through a formal, written attorney/client agreement.