CLDA Magazine - Fall 2016 1 - Page 24

24 F E AT U R E Understanding and Preparing for the New FLSA Salary Rules – Effective December 1, 2016     BY BETH CARROL, PROSPERIO GROUP                                    First, don’t panic. While the change is dramatic, the issue is fundamen- tally a math problem with a heavy dose of human psychology thrown in for good measure. BACKGROUND To manage through a change, it’s good to first understand the history and the players. The federal gov- ernment sets the minimum wage and overtime rules for ALL employ- ers who generate more than $500k in annual revenue/sales in ALL states through the FLSA (Fair Labor Standards Act). Note that a state can be more favorable to employees but not less favorable than the feds; home rule states are not exempt from this requirement. The FLSA has had (for a very long time) a two level check system to determine if overtime must be paid: Check #1: The minimum salary required to consider a position EXEMPT from overtime (no over- time required) was $455 a week ($23,660 a year) and has been for many years Check #2: The duties test that looks at the actual job description and determines if the position falls under one of the defined exemptions (Executive, Administrative, Learned Professional, Outside Sales, Motor Carrier Exemption, Retail Sales, etc.) If an employee’s salary failed #1, #2 didn’t really matter – you must pay overtime (except for Outside Sales – it’s ok for them to have salary less than the minimum (or no sala 䤤)Q!IM=8=HQ! !9)Qͅ䁱ٕЀ̰(ĸȁȤͥЁ݅)хѥѼݽձ)ͽ͕䁵մ݅)̀մ݅(ԁȁȁ̀İ啅ȤQ) ѽ镐1ѥٕ́ͽѥ