Overtime Rule Change

On December 1, the pay threshold for non-exempt employees will be raised from $23,660 to $47,446.  Additionally, the classification for exemption has narrowed, meaning that employees once considered executive, professional or administrative might be eligible for overtime pay. These changes will likely affect many of you.

The question, naturally, has been asked about how a district employing someone who might work over 40 hours per week could handle this with the least amount of financial fallout. Depending on your particular situation, some possibilities might be as follows:

1.  Increase salary to above the threshold in order to keep the employee exempt.

2.  Keep salary the same but pay overtime when it occurs (which would of course give the employee a raise).

3.  Figure out approximately how much overtime will be worked and lower the salary to compensate for it, then pay the overtime as it occurs (thereby keeping the total pay about the same as it previously was). Due process will have to be given if this route is taken.

4.  Use compensatory time to pay for any overtime worked (being mindful that FLSA limits it to 240 hours per year). If you do this, it needs to be in policy.

5.  Use creative scheduling in weeks where there might be overtime so as to avoid the employee working over 40 hours in those weeks.

Because this issue has such potential impact on districts, the OPSRC is bringing in a Department of Labor employee on November 9th to give training on overtime and the new rules. It is free to attend. If you are interested in attending, you may register here.