On Dec. 1, a major change to U.S. overtime laws will go into effect — and might result in changes in your paycheck and your work schedule. Here are answers to some common questions about it.
What exactly is changing?
Starting on Dec. 1, if you earn less than $47,476 annually, your employer will be legally required to pay you overtime (time and a half) when you work over 40 hours in a week.
To understand the change, you need to know that the federal government divides all workers into two categories: exempt workers, who are not required to receive overtime pay, and nonexempt workers, who must receive overtime pay. The exempt category is reserved for employees who perform relatively high-level executive or professional work, outside sales employees and a few other narrowly defined categories. Currently, you need to earn at least $23,660 a year to be considered exempt — but the new law is raising that to $47,476.
[See: 25 Awesome Business Jobs for 2016.]
In other words, if you don’t earn at least $47,476, then starting on Dec. 1 your employer very likely will owe you overtime pay whenever you work over 40 hours in a week. (That’s “very likely” rather than “definitely” because there are some narrow exceptions to the law. For example, it excludes doctors, lawyers and teachers, regardless of what salary they earn. But the vast majority of American workers are covered.)
How are employers likely to handle this in practice?
Your employer might decide to raise your salary to the new threshold of $47,476 in order to avoid having to pay you overtime. This is the most likely option for people who work a lot of overtime or who are already very close to the new salary threshold.
[See: 8 Things You Really Need to Know About the Family and Medical Leave Act.]
Or, your employer might prohibit you from working over 40 hours in a week or require you to get advance approval for any overtime. Your employer might even reduce your base hourly wage in order to account for the overtime pay you’ll receive, thus keeping your overall annual compensation the same.
You might be required to start tracking your time in a way you didn’t have to before. It’s possible that some employers may change the amount of flexibility they offer. For example, if you’re currently able to work 35 hours this week when work is slow and work 50 hours next week when demands are higher, you may not be allowed to do that anymore, since your employer will have to pay overtime for those extra 10 hours the second week.
If I don’t meet the new salary threshold, can I remain salaried or will I have to switch to hourly?
It’s up to your employer, but one option is to make you “salaried nonexempt” — meaning that you get paid the same regular salary from week to week, but you get overtime on top of it during weeks where you work more than 40 hours.
[See: 10 Things They Don’t Tell You About Your First Job.]
Currently, I get comp time when I work overtime. Will that remain an option?
If you’re in the group of people who must be paid overtime, you can only be paid in compensatory time if you use it during the same workweek. For example, if you normally work eight hours a day but on Monday you ended up working two extra hours, your employer could give you two hours of comp time to use before the end of the week — thus keeping your total hours for the week from going over 40.
But you can’t bank comp time to use in a different week, because the law requires that you be paid — in money, not banked time — for all hours over 40 that you work in any given week.
Are there exceptions in the law for small employers or nonprofit organizations?
Small employers are not exempt from the law.
Nonprofits as organizations are covered by this law if they have at least $500,000 per year in business revenue. However, even if your organization isn’t covered under that provision, individual employees at nonprofits are covered under the law if they engage in interstate commerce in the course of their work, which includes making out-of-state phone calls, receiving or sending interstate mail or email and ordering or receiving goods from an out-of-state supplier. As a result, the new law will affect most nonprofit employees.
How can I find out how my employer will be handling this for my job?
If you haven’t yet heard anything from your employer about how they will be handling this, it’s reasonable to ask! Seek out information from your manager or someone in human resources.
15 Awesome Jobs That Pay More Than $90K
More from U.S. News
10 Reasons to Quit Your Job Already
Here’s What You Should Know About Gen Z Workers
Are You Ready for the New Overtime Laws? originally appeared on usnews.com
