Final Overtime Regulations Less Drastic Than Feared
Tawny Alvarez and Joanna Bowers provide insights into the new overtime exemption rule that was announced on May 18, 2016 in a Massachusetts Lawyers Weekly article. Although employers have until December 1 of this year before it goes into effect, the article explains why now is the time to plan. Specifically, how the rule will affect nonprofits, higher learning institutions, smaller retail stores and restaurants, as well as other businesses. Not only will employers need to adjust things such as the ways to compensate workers and the treatment of bonuses and commissions. Please find some key excerpts from the article below.
Risks for nonprofits
Verrill Dana's Tawny L. Alvarez, agrees that nonprofits are at risk, particularly because they may believe themselves to be insulated from the federal rule as they do not generate over $500,000 in business.
In addition, the DOL has indicated that nonprofits will not be a big focus of its enforcement efforts, said Alvarez's colleague, Joanna S. Bowers. But that should not lull such organizations into a false sense of security, she said.
Joanna Bowers on impacts for higher education institutions.
Bowers noted that the DOL has made allowances for certain positions at colleges and universities to remain exempt, even if compensated under the salary threshold. She cited admissions officers, whose work weeks spike to well over 40 hours during certain times of the year, and thus might otherwise be eligible for budget-busting amounts of overtime pay.
Tawny Alvarez on the decision to automatically update the salary threshold every three years.
The looming challenge in 2020 should not be underestimated, Alvarez said, noting that the 40th percentile salary level could see a "significant jump," into the low $60,000 range, rather than the low $50,000 range.
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