Potential Overtime Rules Could Change Your Business’ Payroll Accounting

The U.S. Department of Labor (DOL) recently proposed regulations to increase the minimum salary an employee must earn to be exempt from the Fair Labor Standards Act (FLSA) overtime requirements, and if enacted, the change could significantly affect your bottom line.Under current regulations, employees who earn $455 per week or less ($23,660 annually) are “nonexempt.” Employers must pay these employees overtime (at least time-and-a-half) if they work more than 40 hours in a week.Under the new proposed regulation, the minimum salary for exempt executive, professional and administrative employees increases to $921 per week ($47,892 annually). The proposed regulation will also codify a process to update the minimum salary every year (the current salary levels were last updated in 2004).Changes weren’t proposed to the “salary-basis test”—the requirement that workers be paid a pre-determined amount that can’t be reduced because of variations in the quality or amount of the employees’ work.For more information, view a copy of the DOL’s proposed regulations. This document also contains guidelines for submitting comments on the proposal.If you’re unsure how these new regulations may affect your business, the payroll accounting team at Patrick & Robinson CPAs are here for you. Contact us at (904) 396-5400 or Office@CPAsite.com.