Video: Employers Gear Up For New Overtime Rules

WINONA, Miss. (WCBI)-Employers will soon have to change the way they do business.

The U.S. Department of Labor is requiring everyone that makes under $47,000 a year to be eligible for overtime when they work more than 40 hours a week.
The regulation doubles the annual $23,000 salary threshold that’s in place now.

Employers must decide whether to raise workers salaries, switch them to hourly pay, or reduce hours.

“It’s going to cause employers to re-evaluate their pay scales,” said attorney Ray Baum.

Baum said the new federal overtime regulation will create a lot changes for employers and employees before it goes into effect December 1st.

“Some salary employees will have to start being paid on an hourly rate, and be entitled to overtime if they work more than 40 hours a week,” said Baum.

This only applies to employees making under $47,000 a year, but there are some exemptions.

Meaning, an employee’s job duties will determine which category they fall under.

“Essentially, there are two tests to see if you’re entitled to anything over 40 hours,” said Baum. “First is the salary test, if you make anything over $47,000, plus the standard duties test, you have to be in the executive, administrative, and professional category.”

Now, many businesses are saying they simply can’t afford to pay workers the required amount.

“Some departments heads may not make the $47,000, and so they would either raise their salaries up past the $47,000 or start paying an hourly wage,” said Baum.

The payroll guidelines are also impacting towns.

Winona Mayor Jerry Flowers said the issue must be addressed before a new budget is created.

“Say they’re making 40 thousand dollars, we’ll project out on the number of hours they work, and see what’s better for the citizens of Winona,” said mayor Flowers. “Do we bump up his salary up to 47 thousand dollars or pay him time and a half after 40 hours of work.”

Flowers said city leaders will make the necessary adjustments.

“If we have to bump up a supervisors salary, then we’ll take care of it,” he said.
For a full and complete overview of the new overtime rule, visit https://www.dol.gov/sites/default/files/overtime-overview.pdf