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Published April 04, 2019
A weekly look at issues facing Wyoming business owners and entrepreneurs from the Wyoming Small Business Development Center (SBDC) Network, a collection of business assistance programs at the University of Wyoming.
By Michael Lambert, MRC manager, Wyoming SBDC Network
If your business has exempt employees (employees who do not have to be paid overtime), then you should pay attention to new proposed rules issued last month by the Department of Labor (DOL). The proposed rules will raise the minimum salary level used to determine whether an employee is exempt from receiving overtime pay for working more than 40 hours in one workweek.
Currently, the salary threshold is $455 per week, or $23,660 per year. The proposed new DOL rules will raise the threshold to $679 per week, or $35,308 per year. Other changes to the rule allow employers to include “certain nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new $679 per week salary threshold.” Additionally, the salary threshold to qualify for the “highly compensated employees” category (who are subject to a less rigorous duties test) will increase from $100,000 to $147,414.
What’s the bottom line? The DOL estimates that around 1.1 million people will start receiving overtime pay who currently are exempt. What should your business do?
Immediately begin auditing your exempt employees who currently make more than the old $23,660 per year and less than the new limit. Anyone who earns more than $35,308 also needs to meet the duties test of working in specifically defined executive, administrative, professional and outside sales roles to qualify as exempt. These “duties tests” are not changing, but you really should audit all exempt employees to ensure that you are properly classifying them.
If you have any “highly compensated” employees who earn between $100,000 to the new $147,414 who would not pass the duties test, they may need to be reclassified as well.
Comments will be taken for 60 days by the DOL, with implementation of the new rules expected in January 2020.
Will this have an impact on your business? If you’d like to discuss this with one of our regional directors, contact the Wyoming SBDC Network on our website, www.wyomingsbdc.org.
The Wyoming SBDC Network offers business expertise to help Wyoming residents think about, launch, grow, reinvent or exit their business. The Wyoming SBDC Network is hosted by UW with state funds from the Wyoming Business Council and funded, in part, through a cooperative agreement with the U.S. Small Business Administration.
To ask a question, call 1-800-348-5194, email email@example.com, or write 1000 E. University Ave., Dept. 3922, Laramie, WY, 82071-3922.