If you make less than 50 but you work more than 40 you need 1.5: Major Change to the FLSA in 2016

Categories: blog

Written by Karina Xart.

Presently, to be lawfully classified as a “salaried” (or as it’s defined under the law “exempt”) employee under the Fair Labor Standards Act (FLSA), the employee must receive $455 per week, which is approximately $23,660 per year, among other factors. However, according to an announcement from the White House this week, the FLSA is undergoing a significant change and more than doubling the current minimum wage requirement of $455 per week and $23,660.

As of December 1, 2016 the new minimum wage requirement for a salaried employee will be $970 per week and $50,440 per year. Statistically, this change is expected to affect over 5 million Americans. As a result, if a company does not either (a) raise the employee’s salary to $970 weekly or (b) pay the employee on an hourly basis (and overtime) it will be subjecting itself to liability under the FLSA.

Damages under the FLSA include the unpaid wages due to the employee, unpaid overtime, plus twice the actual amount owed in wages (classified as liquidated damages), and attorney’s fees. For example, if a salaried employee making $900 weekly and working 60 hours weekly is kept as a salaried employee after the changes take effect, and continues working 60 hours weekly, in as little as one year the company has opened itself up to liability in the amount of $15,000 (plus attorney’s fees and costs) for just that one employee for only one year.

Although the changes under the FLSA can result in a devastating loss to many companies, Wilson McCoy can help your company weigh its options and come up with the most financially sound alternative that will both protect your company from liability but also avoid affecting your company’s revenue.

For more detail, visit our previously posted blog: “Employers Beware! How Obama’s Overtime Changes Will Affect You