If your business is covered by the Fair Labor Standards Act (FLSA), you may be required to give all of your salaried employees who perform executive, administrative or professional (EAP) duties a raise.
As of December 1, 2016, the new minimum wage for full-time salaried workers is $913 per week. Previously, the minimum wage was $455 per week.
December 1, 2016 is a Thursday, so this change will need to be made based on the payroll period that covers December 1, and it may be mid-pay period.
In the event that your EAP employees are paid commissions or other incentive-based pay, you can count those payments for up to 10% of the minimum salary amount, so long as these amounts are paid at least quarterly.
Any employees considered highly-compensated employees (HCE) under the FLSA must now be paid a minimum of $134,004 a year, as of December 1, up from $100,000 annually, previously.
It may be time to require existing salaried employees to begin tracking their time or shift salaried employees to hourly with the prospect of paying overtime instead of the increased salary, and this is an analysis we can help you to best understand and then roll out to your employees.
If you need help identifying whether your business is covered by these rules and which of your employees are exempt EAP employees or HCEs under the new rules, contact us. That’s why we are here. There are significant costs if you make this analysis incorrectly, so let us help.
This article is a service of Gratia P. Schoemakers, Creative Business Lawyer®. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule.