Federal Overtime Laws
New Federal Overtime Laws: Wage and Hour
NC Attorneys Explain the Final Rule on Overtime
Unlike hourly workers, whose pay depends on the time spent on the job, salaried workers receive a fixed amount of money each year, regardless of the number of hours logged at work. However, even if you receive a salary, you may still be able to collect overtime pay if you work more than 40 hours per week. In general, your right to overtime compensation depends on how much you make per year. If you make more than the minimum salary as defined by the federal overtime laws specified by the United States Department of Labor (DOL), you may be exempt from overtime pay.
The DOL plans to enforce new guidelines concerning overtime for workers, effective December 1, 2016. These new overtime laws will more than double the minimum salary threshold, entitling millions of workers to additional compensation if they work more than 40 hours in a week. However, some states have challenged this enforcement date. For the most up-to-date information about these new guidelines, call our law offices at (800) 525-7111.
At Riddle & Brantley, our attorneys share a commitment to representing the rights of North Carolina workers in all industries. If your employer denies you rightful overtime pay, contact our legal teams in Goldsboro, Raleigh, Jacksonville on Kinston. We can answer your questions, explain your rights and help you hold your employer accountable to these new overtime laws.
What are the New Federal Overtime Laws?
According to the Fair Labor Standards Act, all nonexempt employees must receive overtime pay if they work more than 40 hours in a week. This applies to both nonexempt salaried and hourly workers. However, according to DOL rules, salaried workers may be exempt from overtime pay depending on how much they make and what kind of work they do.
On December 1, 2016, the Final Rule on Overtime can be enforced, which primarily concerns the wage rights for salaried workers. These new overtime laws will raise the minimum pay for exempt salaried workers to $47,476 per year. This is more than double the previous minimum, which was $23,660 a year. In addition, an employee must meet several other requirements for exemption.
This means that, according to federal overtime laws, if you make a salary of less than $47,476 per year ($913 per week), you are not exempt from overtime pay. Therefore, if you work more than 40 hours in a week, your employer must pay you time and a half for all additional work time. The DOL estimates that this new rule will affect over 4 million workers, and over 150,000 employees in North Carolina alone.
Many employers must now determine how to compensate highly-skilled professional and administrative staff who normally log more than 40 hours of work per week. To avoid paying overtime wages, your employer must raise your yearly salary to $47,476. Otherwise, he or she must ensure you work only 40 hours a week. Some employers may switch salaried workers to hourly wage instead.
What is the White Collar Exemption?
In addition to the federally mandated minimum salary, your work must meet certain other criteria for you to be exempt from overtime pay rights. These “white collar exemptions” typically apply to employees who have some management-level responsibilities. In order to qualify for a white collar exemption, you must:
- Receive a salary, not hourly wages.
- Make at least $47,476 a year (this amount is periodically adjusted). Typically, at least 90 percent of this amount must be paid on a salary or fee basis. The remaining 10 percent may be bonuses or incentive pay.
- Pass the duties test. This means that you must have executive, administrative or professional responsibilities.
- Executive duties include management of at least two or more other full-time employees, or the equivalent.
- Administrative responsibilities include office work directly related to management or general business operations. This must include the ability to exercise discretion and independent judgement in significant business matters.
- Professional employees include doctors, teachers, lawyers, computer workers and other learned or creative professionals whose work requires an advanced degree. These exempt employees are usually not eligible for overtime regardless of how they are paid.
Additionally, highly compensated employees are subject to a more relaxed duties test, and are therefore often exempt from overtime pay. According to the new federal overtime laws, a highly compensated employee is anyone who receives an annual salary over $134,004.
If you do not meet all three of these requirements, you are nonexempt and entitled to overtime pay.
Questions about the New Overtime Laws? Contact Our North Carolina Attorneys Now
DOL regulations can be confusing, and many employers may try to avoid following federal overtime laws. However, it is your right as an employee to fight for the pay you legally deserve. Contact the North Carolina attorneys at Riddle & Brantley to find out how we can help you get your rightful overtime pay. We offer free initial consultations from our offices in Goldsboro, Raleigh, Jacksonville and Kinston.