As of 11/22/16, a Texas federal judge has issued an injunction barring enforcement of the new U.S. Department of Labor overtime regulations that had been scheduled to become effective on December 1. Employers in all states are no longer required to comply with these rule changes.

Now that the Department of Labor has raised the minimum exemption salary to $47,476 per year, making 4.2 million more employees eligible for overtime pay, the next move is yours. Should you change all affected exempt employees to nonexempt, and pay more overtime when applicable? Or would raising all exempt employee salaries above the new threshold work out better for your wallet?

The compliance date for all employers is December 1, 2016, so you don’t have long to choose. Finding the answer means doing the math.

Find your best strategy with CEDR’s Overtime Calculator.

Enter your exempt employees’ salaries that currently fall under the new threshold of $47,476, along with all estimated non-discretionary bonus pay and the average overtime hours you expect the employees to work in 2017.

We’ll calculate your likely overtime costs if you change these employees to nonexempt, and recommend whether that or a salary raise to maintain exempt status is more cost effective.


Annual
Salary ($)
Non-Discretionary
Bonus Pay ($)
Overtime
per Week (Hrs)
Additional
Overtime ($)
Recommendation
Employee 1
Employee 2
Employee 3
Employee 4
Employee 5
Employee 6
Employee 7
Employee 8
Employee 9
Employee 10


CALCULATOR ANSWER KEY

Do not increase annual salary = Based on the numbers you entered, we’ve calculated that increasing this person’s salary to meet the new threshold for exempt status would be more costly than classifying them as non-exempt and paying overtime. (You’re better off paying overtime!)

Increase annual salary to at least $47,476 = Based on the numbers you entered, we’ve calculated that increasing this person’s salary to meet the new threshold for exempt status would be less costly than classifying them as non-exempt and paying overtime. (You’re better off raising their annual pay to at least $47,476!)

Salary already exceeds new threshold = The salary exceeds the $47,476 per year threshold.

For more information on exempt status and the duties test required to determine whether a particular employee may be classified as exempt, please visit our Exempt vs. Non-Exempt Classification Guide HERE.

COMPLIANCE GOES BEYOND NEW OVERTIME RULES

Do you own or manage an independent dental or medical practice? You’ll want to know about our FREE Employee Handbook Evaluation! CEDR specializes in helping healthcare practices comply with employment laws. We’re HR experts, and we can let you know if your current policies are protecting you, or putting you at risk.

To get started, just email eval@cedrsolutions.com and put “Free Handbook Evaluation (Overtime Calculator)” in the subject line. Include your first and last name, phone number, and a copy of your current employee handbook. We’ll take it from there!

DID YOUR HR PREPARE YOU FOR THE FLSA OVERTIME RULE CHANGE?

If you didn’t hear much about this before the law changed, you’re not being educated and protected the way you should be. Click here to learn why CEDR HR Solutions is your BEST option for Custom Employee Handbooks and Unlimited HR Support.

Or, call 866-414-6056 and we’ll answer your questions in person. Talk to you soon!