Accuchex Blog

Payroll Management And Overtime Pay Rules: Changes Postponed?

Posted by Tristan Ruhland on Nov 13, 2015 1:10:00 PM

payroll-management-and-overtime-pay-rules-changes-postponed-postNew Rule for Overtime Pay May Not Happen Until After 2016

HR professionals and payroll management personnel are breathing a bit easier in some companies now.

According to a recent report in the Wall Street Journal the U.S. Labor Department's proposed new overtime rule may come far later than anticipated.

"Employers have been scrambling to prepare for a new rule that will sharply increase the number of U.S. workers who are eligible for overtime pay, but they may have more time than they thought."

This is due in part because the Labor Department's final rule on overtime eligibility isn't likely to be finalized before the fourth quarter of 2016, said Solicitor of Labor Patricia Smith at a recent panel discussion.

Labor Laws and Employer Compliance

Employers had been expecting the new rule to go into effect by the end of this year or in 2016's first quarter. The new time line may have surprised many in the audience at the American Bar Association's Labor and Employment Law conference in Philadelphia last week. After the new rule proposal was announced back in 2014, approximately 270,000 people and organizations submitted comments to the Labor Department on the proposed change, more than triple the number received in 2004 when the rules were last changed.

The U.S. Department of Labor’s (DOL) proposed expansion of overtime protections is expected to impact millions of employees and their employers. The DOL last updated their regulations in 2004 which set the current salary threshold for exemption at $455 per week or $23,660 per year.

Payroll Management and DOL Overtime Rules

Under the new rule, the DOL has proposed that the minimum salary level for these exemptions be set at the 40th percentile of earnings for full-time salaried workers. This has been estimated for a new level to be about $970 a week, or $50,440 a year. A new minimum annual compensation needed to qualify for the highly compensated exemption is proposed to be set at the 90th percentile.

According to the DOL website they want to update the salary level required for exemption to ensure that the Fair Labor Standards Act’s intended overtime protections are fully implemented, and to simplify the identification of nonexempt employees, thus making the executive, administrative and professional employee exemption easier for employers and workers to understand and apply.

Where to go for Help on Payroll Management Changes and  Questions

It is critical to keep your company safe and your management team informed and in compliance.If you have questions regarding this, or other HR issues and practices, let us help you in managing your HR needs, payroll processes, and staying on top of compliance demands. Get your Free Download: Payroll Outsourcing Guide to help you make an informed decision or call Accuchex Payroll Management Services at 877-422-2824.


Free Download: Payroll Outsourcing Guide

Topics: payroll management, HR compliance, overtime pay, labor law compliance

Subscribe to the Accuchex Blog