Mandatory legal stuff: The below advice is considered general advice. It may or may not apply to your specific situation. Please contact us with your specific questions.
Just because an employee is considered “salary” does not necessary mean that they are exempt from the over time laws. The Fair Labor Standards Act (FLSA) states that any employee who makes less than $35,568 on an annual basis (with some exceptions based on the type of job) is entitled to be paid at 1 and a half times their normal rate for any hours worked over 40 in a work week (overtime).
Other Legal note: The Fair Labor Standards Act (FSLA) only applies to companies with over $500,000 in sales annually. However, many states and districts apply their own rules when the FLSA does apply. Many of these rules mirror exactly to the FSLA.
Based on this guidance we recommend the following actions to our clients:
1. As the guidance does not give an exact definition of a “work week”, for consistency purposes, define a work week as starting on a Monday and ending on a Sunday.
2. Employees pay employees at 1.5 times their normal rate for any hours worked over 40 from a given Monday through Sunday
3. When hiring salaried employees, set their pay at least $36,000 per year. Additionally, increase their pay as the required overtime amount increases with inflation (usually on an annual basis)
4. If your company has an employee’s whose salary is near or at the threshold, have them track their hours on a weekly basis.
For additional information, please see: https://www.dol.gov/agencies/whd/overtime or your applicable state’s website. Additionally, you can contact us directly to discuss your specific situation.