Are You Ready for the Upcoming Overtime Rule Changes?

October 20th, 2016

Early this year, President Obama signed a bill intended to increase the salary threshold overtime pay for millions of U.S. workers. When the bill goes into effect, the threshold for overtime pay will increase nearly double. This means any employee with any job title will be eligible to earn overtime if they do not meet the minimum pay required. The current threshold for exempt employees is currently just over $23,000 annually. The new rule will increase this to over $47,000. More employees will qualify for time and a half if they work more than 40 hours per week. Is your company ready for these new rules? Here is how you can prepare for the change coming in December 2016.

Encourage 40-hour work weeks.

The best way to avoid paying overtime for your exempt workers is to enforce 40-hour work weeks. If they do not clock overtime, you don’t need to worry about paying for additional time and a half. Not only will this help you adhere to the new rules, but it will also help improve the work/life balance of your employees.

Increase your staff.

To help reduce the need for overtime, you may want to hire additional employees within the office. Hiring another full-time employee can often be less expensive than paying overtime hours the staff you currently have employed. For example, you can hire an assistant to help senior staff work more efficiently.

Adjust cost of living raises appropriately.

There may be instances where the new overtime pay can become a de-facto raise. Rather than increasing their base salary during their year-end review, continue with their current salary and adjust pay overtime. You can both evaluate how this works over the next several months and adjust as necessary.

Work with a staffing agency.

Your staffing partner can work with you to place individuals within your business as temporary employees. They can increase your production and not your overtime hours since their employer of record is the agency, not your company. The fee you pay to the staffing company will handle the employee pay rate and any administrative costs, which may work out to less than a permanent salary.

If your organization has any staffing needs because of the upcoming overtime legislation or just has employment needs in general, don’t hesitate to contact Meador Staffing today. As a leader in temp services in Houston, we are ready to help your company!

houston-tx-staffing