New Overtime Rule
December 1, 2016, is the effective date imposed by the Department of Labor (DOL) to increase the standard salary level for employees from $455 per week to $913 per week. Employees earning less than that amount (or $47,476 annually) must be paid time and a half for hours over 40 per week, even if they are classified as a manager or professional.
As expected, many small businesses, nonprofit organizations and higher education institutions are finding the new rule difficult to swallow. Reclassifying employees as nonexempt and restricting their work hours to no more than 40 per week is their solution, rather than increasing pay.
For the first time, employers may also use nondiscretionary bonuses, commissions and incentive payments tied to productivity and profitability. For employers to use these payments toward a portion of their employees’ salary, the payments need to be made at least quarterly and permit a “catch-up” payment.
The Final Ruling of the DOL did not change any of the existing job duty requirements to qualify for an exemption. Bona fide teachers will continue to be exempt, as they currently are. The salary threshold will increase every three years and is expected to be more than $51,000 on January 1, 2020.
Minimum Wage to Increase on January 1
Ohio’s minimum hourly wage for non-tipped employees will increase by 5 cents to $8.15 per hour because of inflation. Tipped workers must be paid $4.08 an hour. These rates go into effect on January 1, 2017. The Consumer Price Index rose .7 percent in the past year, which means the minimum wage must increase by that amount.
About ten years ago, Ohio voters approved annual increases tied to inflation through a 2006 amendment to the State Constitution. In 2016, Ohio’s minimum wage increased by 15 cents to $8.10 an hour and the minimum wage for tipped workers increased 7 cents to $4.05 an hour.
The new wages applies to organizations and companies with annual gross receipts of more than $297,000 a year. The federal minimum wage of $7.25 per hour applies for smaller companies and for workers 14 or 15 years old. That wage can only be adjusted by Congress.
-Sharon Trabbic, COO