Are your salaried employees exempt from overtime? Just because an employee is salaried doesn’t necessarily make the employee exempt from overtime. This has come up some in the past but beginning January 1, 2020, it could be a bit more of an issue.

We’re not going to get into what all is required for an employee to be considered exempt from overtime but understand that there are both a minimum salary as well as a duties test. Even if the employee has the duties, there is a minimum salary the employee must have in order to qualify. In the past that level has been $455. On January 1, it becomes $684 or $35,568 annually.

If you have employees that are currently salaried and exempt from overtime, make sure that they are making the new minimum or you will need to make them non-exempt. This means that they will need to have their hours kept and overtime paid for work over 40 hours in a typical week.

If you want to continue paying these employees a salary, there are ways of doing it while still being not exempt from overtime but it can get pretty complicated. I would recommend doing an internet search for “salaried non-exempt” and looking at several labor lawyer sites to get the full story. It isn’t trivial and you will still have to keep up with the hours those employees work. We can help if you have questions.

For now, just understand that at the very minimum you must be paying your exempt employees (those exempt from overtime) a minimum of $684 per week. More information on the new rule can be found HERE.Pay particular attention to the small business compliance guide on that page.