Legal Hero Blog The Feds Expand Overtime Coverage

Many entrepreneurs don't give much thought to overtime rules. Unless they have hourly employees, the common thinking goes, there's no need to worry about overtime rules. An entrepreneur may have been able to get by with that thinking in the past, but there is a new rule about overtime that changes a lot, and every entrepreneur should be aware. Starting in December 2016, a large group of employees will be eligible for overtime if they work more than 40 hours per week. The New RuleOn May 18, the Obama administration announced finalized rules under the Fair Labor Standards Act (FLSA). The new rules change the definition of who is "exempt" under overtime rules. Starting in December, all employees earning less than $47,476 per year will be entitled to overtime pay (1.5 times the employee's hourly rate) for every hour over 40 hours per week worked. Under the previous rules, employees earning less than $23,660 would be eligible for overtime pay. The doubling of that amount is one of the most significant changes to federal overtime rules in years. The Department of Labor estimates that these changes impact 4.2 million workers, although other organizations claim the number is closer to 12 million.