Overtime Pay Eligibility Expanded – What Businesses Need to Know

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President Obama, declaring that “Americans have spent too long working more and getting less in return,” ordered the Labor Department to revise federal rules on overtime pay for salaried workers that log more than 40 hours a week. The long-awaited rule change will extend overtime pay to an estimated 4.2M workers.

Under current federal regulations, only salaried employees who make no more than $455 a week, or $23,660 a year, are guaranteed to receive overtime after working more than 40 hours a week. The new rules would raise that threshold to $913 a week, or $47,476 a year, giving salaried workers who are higher up the income scale the ability to work less or earn more for long hours.

The ruling also establishes a mechanism for automatically updating the salary and compensation levels every three years.

You can find detailed information on this new ruling on the United States Department of Labor website: https://www.dol.gov/whd/overtime/final2016/index.htm

Please feel free to contact our office if you have questions.

Steven M. Ellard, CPA

Steven M. Ellard, CPA, owns Steven M. Ellard, CPA, an accounting firm on Cape Cod, Massachusetts. He has more than 30 years of accounting and tax experience. His firm handles bookkeeping, payroll, tax and accounting for local businesses, with tax planning that runs all year instead of only at filing time. In 2015, Intuit named the firm one of its 20 Firms of the Future in the country.