New Salary Threshold for Exempt Employees

UPDATE: November 22, 2016 – A federal judge has delayed the new overtime rule. At this time it is not known how long the rule will be delayed or if the new rule will be enforced at all in the future.  The minimum salary threshold for exempt employees will remain at $455 per week until further notice.

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The Department of Labor (DOL) has issued the much anticipated final rules regarding overtime for salary employees.

Under the Fair Labor Standards Act (FLSA), the minimum pay for exempt employees is currently $455 per week (or $23,660 per year). Under the new rule, effective December 1, 2016, the minimum pay will increase to $913 per week (or $47,476 per year). The salary threshold will automatically be updated every three years, beginning on January 1, 2020, based on average wage growth.

An added provision of the new rule is the ability for employers to include nondiscretionary bonuses and incentive payments, including commissions, up to 10 percent of gross wages, to meet the minimum salary requirements. For example, if an employee is paid $44,000 base salary and receives a bonus of $4,000 per year (less than 10% of their gross annual salary), they could still be considered exempt under the new rule because their total compensation ($48,000) is higher than the new salary threshold.

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New York to Begin Paid Family Leave Program

On April 4, 2016, New York Governor Andrew Cuomo signed a new law which will allow eligible employees to receive paid family leave benefits. New York is the fourth state to enact legislation requiring paid family leave, following California, New Jersey and Rhode Island. The paid family leave benefits will gradually be implemented, eventually statue-of-liberty-962268_1280reaching a maximum of 12 weeks of leave by January 1, 2021.

The new paid leave will be funded by New York’s disability benefits fund through mandatory employee payroll deductions of approximately $1.00 per week. Employers will not be obligated to pay employees for time off under the new paid family leave program.

Employees will be eligible for paid family leave benefits after six consecutive months of employment with the same employer. All employees working at least 6 months at a single employer are eligible, regardless of the company size or the number of hour
s the employee has worked for that employer. Continue reading

Vacation Pay: Optional or Mandatory?

1428638_61478545An employee leaves without giving any advance notice.  Are you required to compensate that employee for unused vacation and personal time?

You are not required under any federal or state laws to offer vacation or personal time off benefits, with or without pay. (Note: Some cities and states do require paid sick leave). But if you offer vacation time with pay, sick leave with pay and/or paid time off (PTO), you need to be aware of possible regulations in your state regarding compensation.

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