Ready for New Overtime Rules? 5 Answers to Your Last-Minute Questions

Here’s what your small business needs to know about complying with federal overtime regulations before the Dec. 1 deadline.

With changes to the Fair Labor Standards Act (FLSA) scheduled to take effect on Dec. 1, you probably have questions about how they apply to your business. The law, which affects businesses with at least two employees and annual sales of $500,000 or more, raises the annual salary minimum for overtime-exempt employees to $47,476.

What does your small business need to do to comply with the new regulations? To answer your last-minute questions, we turned to the experts at Paychex for advice.

Q: Can nonexempt employees ever be paid salaries over the threshold, allowing them to be considered exempt and paid a salary without overtime pay?

A: Determining whether an employee is exempt from the FLSA’s minimum wage and overtime requirements goes beyond simply paying that person a salary. Both salary and job duties must meet the requirements provided in the regulations. Employers need to make sure their employees are paid at least the minimum wage for the first 40 hours in the workweek—and time-and-a-half their regular rate of pay for any hours beyond that.

Q: If an employee converts from exempt to nonexempt status, should that person’s job duties also change to ensure he or she does not have supervisory duties?

A: While it’s not necessary to change the employee’s duties, he or she will need to track hours for record keeping compliance and to ensure that minimum wage and overtime provisions are met.