There is an exception for certain types of workers (managers, administrators, etc.) that makes it so that you don’t have to pay overtime if they are paid salary over a certain amount.
The government is changing the salary cap for the exemption from $23,600 per year to $47,476 (see the FLSA article here). That means that it’s going to double.
What does that mean for you? If you are paying employees salaries then you are going to need to either:
- Make sure that they are over the 47,476 per year, or
- Change them back to hourly employees.
Remember your state wage laws. If your state is more strict then you will need to follow the state laws instead of the federal. California has some provisions that will be more strict than the federal wage laws.
Be careful with the social stigma. If you change an employee from salary to hourly you might make them feel less important on your team. So when you do change employees pay make sure that you do it conscientiously.
For some more tips on presenting the change to your employees see this article.
*Just an update here, looks like the FLSA Exemption was put on hold for now. See this Article for more information.