Every employer needs to be familiar with the Fair Labor Standards Act, or FSLA, which governs minimum wage, overtime provisions, and exempt/non-exempt status for employees. Recently, there have been changes to the FSLA that employers need to be aware of so they may remain in compliance. These changes take effect December 1, 2016 and employers who are not in compliance risk treble damages.
The Most Important Changes to Note
While there are many changes that will go into effect at the beginning of December, the most critical are to the salary threshold at which employees are eligible for overtime pay. Since 2004, employees who earned less than $23,660 annually were eligible for overtime. On December 1, the threshold will increase substantially to $47,476 annually. Bonuses and commissions up to 10% of an employee’s total salary can be counted towards this figure if they are paid on a quarterly or more frequent basis.
Going forward the salary threshold is set to automatically increase every three years to account for inflation and the rise in cost of living, whereas before the salary threshold didn’t change for 12 years until new regulations were passed.
Watch this video to learn what you, as an employer, need to be doing right now to prepare for these upcoming changes in December and how you can remain in compliance with the Fair Labor Standards Act.