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New rules regarding salaried workers’ overtime pay

On Behalf of | Aug 23, 2016 | Employee Rights |

There are many national and state laws in place protecting the rights of workers, including overtime pay. Although overtime is often considered more with hourly employees than salaried, some salaried employees in Minnesota are also eligible to receive overtime pay. According to the ABC News, a new federal law going into effect on December 1, 2016, changes the Fair Labor Standards Act and alters the overtime pay due to salaried workers.

The new changes will impact 4.2 million employees around the country. Previous to the changes, the eligibility cutoff for a salaried worker was $23,660. That meant employees making more than this amount could work well over the 40-hour work week without any additional compensation under federal law.

Under the new ruling, that threshold increases to $47,476. Reviewing standard salary for full-time workers the South, the lowest-wage region, and choosing the 40th percentile of earnings determined the amount. Updates every three years are expected to coincide with inflation. Employees making between $23,660 and $47,476 who previously were exempt from overtime pay will now be eligible.

There are also some who make more than the $47,476 who might likewise earn overtime, while others might be exempt even if they earn under this threshold. Certain duties, defined under the categories of “executive, administrative and professional” are exempt from overtime. Highly compensated employees saw their threshold for being exempt from overtime raised from $100,000 to $134,004.

Minnesota companies must adhere the federal Fair Labor Standards Act, as well as the state laws. According to the Minnesota Department of Labor and Industry, the state labor laws assert that within a seven-day work week, any hours worked beyond 48 must be paid the overtime rate of 1.5 times the regular rate of pay. This is for all employees, including salaried employees, no matter the employee’s gross annual income.



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