Napier & Company, LCC

Good news for some salaried workers! Employees earning less than $23,600 per year ($455 per week) are now guaranteed overtime protection according to the new “FairPay” rules.

As of August 23rd the new federal overtime rules went into place. The new rules mainly relate to employees who get paid on a salary basis. However, not all employees who receive a salary will qualify for overtime pay. There are a few rules which will exempt some employees from getting paid overtime.

A worker must earn $455 or more per week to be considered exempt from overtime pay. Other exemptions from overtime pertain to executive, administrative and professional employees – otherwise known as “white collar” employees. An employee must meet a combination of duties test within each of these categories and be paid on a salary basis before they’re deemed exempt from overtime pay.

The “Duties Test” generally requires the employee’s primary duties include management or supervisory control over other employees. The “Salary Test” states that “white collar” employees must be paid on a salary basis earning $455 or more per week. The salary of $455 per week is the federal level. Oregon’s salary level is $276 per week. According to federal law, employers are required to use the salary level which is more beneficial to the employee, which would be the federal amount in Oregon.

There are consequences to employers who ignore the rules or misclassify an employee. The employer may be subject to substantial overtime liability. Misclassifications are usually due to the misconception that if you receive a salary you then you don’t qualify for overtime pay.

For more information on the new “FairPay” rules, go to the Department of Labor online at www.dol.gov/fairpay.