Monday, July 25, 2016

What Your Business Needs to Know about the new Overtime Rules

If your business and its employees are used to the old way of doing things when it comes to overtime rules, it’s time to wake up! New overtime rules have recently been released, and, unfortunately, the vast majority of businesses aren’t aware of the new rules and/or don’t believe that their businesses will be affected. Unfortunately, however, the statistics from the United States Department of Labor, which estimate that over 4 million workers will be affected by these new rules, don’t line up with those beliefs.

Under the new rules, the salary threshold is raised for many executive, administrative, and professional employees, when it comes to being exempt from the Fair Labor Standards Act. In December of this year, when the new rules take effect, the threshold will raise a vast amount, from $455 per week for exempt status to $913 per week.

It’s not just the salary threshold that will change either; the total annual compensation requirement necessary for the highly compensated employee exemption will also be raised. It’s moving from $100,000 per year to $134,004 per year.

If you think that your business may be affected in the coming months, then it’s time to take action now. With the help of a qualified financial adviser, you need to look at how your business and its bottom line may be affected by these changes and how you can avoid wage claims and other potential problems. The good news is that you still have time to make these changes and perform these preparations, so the sooner you get started, the better.

Perform an Audit

One of the best ways you can prepare your business for the rule change is to conduct an audit of all of your employees. This audit, which should be conducted with the assistance of a tax adviser and/or compensation specialist, should help you to know which of your employees will likely be affected by the rule changes. Once you have a better idea of how big of a change you are looking at, you and your helpers can more adequately prepare for that change and take steps to reduce the negative impact of it on your business and your employees.

Get the Right Tools Together

Another benefit of accurately understanding and evaluating the impact that these new rules will have on your business is that you can gather tools, such as compliance, time, and attendance software packages, that can help you to avoid back pay and stay in line with the new overtime rules.

The bottom line is that this change is coming, whether you want it to or not, and there is a good chance that, if you don’t prepare properly, it could end up having a vastly negative effect on your business. Don’t take that chance with the business you have built and with your livelihood; start planning and preparing now for best results.