The federal Fair Labor Standards Act (FLSA) requires that all workers (with some exceptions) receive at least a minimum wage (for 2016, the minimum wage in Florida is $8.05 an hour), as well as overtime pay at one and a half times the employee’s regular rate of pay for hours they work beyond 40 in a workweek.­ This applies to both hourly and salaried workers.

Please note:­ It is a common misconception that employees who are paid on a salary basis are automatically exempt from overtime; this is not true.­ Employees on salary must be paid overtime, unless they make a certain amount and their job duties meet specific criteria.­

There are 5 categories of employees who do not have to be paid overtime:­ executive, administrative, professional, outside sales and certain computer-related occupations.­ These are known as the “white collar” exemptions because employees must be paid a certain salary amount and have specific job duties to qualify, like management of other employees or specialized skills that require advance schooling. ­

To qualify for one of these exemptions (and thus not receive overtime pay), employees must meet certain tests regarding their job duties and be paid a certain minimum salary.­ (One side note: the outside sales exemption does not require a minimum salary amount.)

Currently, the minimum salary amount to qualify for an overtime exemption is $23,660.­ Starting December 1, 2016, however, the minimum salary to be exempt from overtime will increase to $47,476.­ This means that salaried employees whose salary is less than $47,476 a year (or $913 a week) cannot be exempt regardless of their job duties and must be paid overtime for all hours over 40 they work in a given workweek, effective December 1st.­

To prevent the salary level from becoming “outdated,” it will be updated automatically every 3 years.­ The first update will take place on January 1, 2020, with future updates occurring every 3 years after.­

This change will entitle many workers making more than the current threshold of $23,660 to overtime pay and will be a big change for small businesses.

>>Click here to download more information explaining this change as well as the “duties test” that employees must meet to qualify for each exemption.<<­

If you have any questions about how this change will affect your business, please call our offices at 800-262-4483 and ask for Karen or Lance.