IAR Recyclers Newspress May / June 2016

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New Employee Overtime Pay Rules
Effective December 1, 2016
Page 16 Recyclers News Press
Actual Systems
Aurora, CO
Al-Jon Manufacturing
Ottumwa, IA
Alter Metal Recycling
Des Moines, IA
Auto Data Direct, Inc.
Tallahassee, FL
Back Lot Auctions, LLC
Maquoketa, IA
Bank Iowa Insurance LLC
Waterloo, IA
Behr Iron & Metal
Mason City, IA
Brad's Used Parts MegaCenter
Viola, IL
Ft Wright, KY
Casualty Adjuster's Guide
of Iowa/Nebraska
Waseca, MN
CheckMate
Ft Wright, KY
On May 18, 2016, the Department of Labor published the final rule updating
the overtime regulations, which will extend overtime pay protections to over 4
million workers within the first year of implementation. This update will result in
a meaningful boost to many workers’ wallets, and will work toward the Presi-
dent’s commitment to ensuring workers are compensated fairly .
The rule changes the overtime regulations as defined in the Fair Labor Stand-
ards Act (FLSA). The most prominent change is the increase in the salary lev-
el required for exemption from overtime to an annual salary of $47,476. This
translates to a weekly salary of $913. Additionally, the Final Rule amends the
salary basis test to allow employers to use incentive payments (including com-
missions) to satisfy up to 10 percent of the new standard salary level.
This means that your employees who currently earn more than the current
threshold of $455 per week ($23,660 annually), but less than the new thresh-
old of $913 per week, need to be reclassified as nonexempt and will be enti-
tled to overtime for any hours worked over 40 in a week. The final rule will take
effect on December 1, 2016.
Reclassifying an employee from exempt to nonexempt offers overtime options,
but may appear to be a loss of status to some newly classified nonexempt em-
ployees. While some employees will welcome the chance to receive overtime
pay, others may see the
need to track actual
hours worked as a demo-
tion. Explain to employ-
ees why this change is
taking place. Discuss the
fact that the standards
are set by the federal
government. The change
is not based on the dis-
cretion of the company
and it is not a reflection
of how the company
views the employee. It is
not a performance issue.
If employees understand
that the changes are ob-
jective rather than sub-
jective standards, they
may feel better about the
transition.
The effective date of
the final rule is Decem-
ber 1, 2016. The initial
increases to the standard