6 months until salary levels increase for exempt employees

Earlier last month, the Department of Labor published a final rule that increases the salary limits for exempt employees.

Under the present-day rule, employees making $23,660 or more are exempt from overtime pay past the 40- hour work week.

However, in roughly six months, certain employees (listed as executive, administrative and professional) must make $47,476 as an annual salary to remain exempt from OT. According to the DOL, this affects roughly 4.2 million U.S. workers.

Fortunately, employers who will soon be affected by this change have options. Here are a few worth examining:

Raise salary levels to maintain exempt status

In order to keep the exemption status of certain employees, employers should think about simply raising salary levels. This may sound obvious but could be a good option for employees who regularly work overtime.

Keep current salary and pay OT only when necessary

Employers can also keep salary levels right where they are but pay overtime when necessary. This may be an optimal option for employers whose businesses spike for only a few short periods of the year where overtime is typically needed.

Restructure resources

Employers can also examine current staffing levels and resources. Some may not have to increase salary threshold or pay overtime at all if resources and workloads were reexamined and redistributed.

Other considerations

It's also important for employers to note that the new rule allows up to 10 percent of an employee's bonus or commission to go towards his or her annual salary amount, which could negating any need to increase the base salary for OT exemption purposes for some.

The final rule takes effect December 1, 2016. Employers in every industry are encouraged to take proactive measures sooner than later, given that more and more and more employees will continue to be affected amid the increase in salary threshold planned every 3 years as stipulated in the rule.

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