With the holiday season now upon us, it comes time for tech managers to pay close attention to changing Federal overtime rules. If your staff takes extra time off, their co-workers might be picking up the slack by working more hours. Failure to note whether or not these workers are exempt from overtime might put your firm on the wrong side of the law if they aren’t properly compensated.
Let’s take a closer look at the latest changes in Federal overtime rules to ensure your payroll requirements stay copacetic. The holidays bring cheer and good will after all, not a watchful eye from Uncle Sam!
Explaining the Differences between Exempt and Non-Exempt Technology Workers
Since 2004, a worker needed to earn at least $23,660 in one year to be considered exempt from overtime in any week they worked over 40 hours. That salary threshold stayed the same since then without any increases related to inflation. This led to more employees – including many retail managers – being overworked without any meaningful compensation.
An Obama administration ruling essentially doubled that salary threshold to $47,476, which caught many employers unaware or forced them to raise salary levels to classify more workers as un-exempt. Just before the law took effect in December of 2016, a judge in Texas issued a temporary injunction to halt it. The Trump administration said they wouldn’t challenge the judge’s ruling, leaving employers and their workers in limbo.
The Current Status of Federal Overtime Laws
The U.S. Department of Labor is currently working on a new overtime law, and asked for input from the public in July. They wonder whether the 2004 threshold needs to be updated based on inflation. Changing things back to the pre-2004 standard where the overtime classification was based on salaried vs. hourly is another option.
Other issues being considered by the Labor Department include the effect of bonuses on exemption status, changing the threshold based on the business sector, and an overall analysis of how companies reacted to the forestalled 2016 rule. Any actual changes to the law likely won’t go into effect until sometime in 2018.
Ultimately, it is important your managers and HR team pay close attention to when the overtime rules actually change. Remember the 2004 rules are still in force during this holiday season.
When you need additional advice on building a great IT team, talk to the experts at Venteon. As one of the top technology staffing agencies in the Midwest, we maintain a robust list of great candidates. Connect with us soon!