Are You Ready for Higher Overtime Costs?

Long hours and 7 day a week schedules are commonplace in the horse industry particularly during show season. Have you stopped to consider whether you should be paying your employees overtime?   The current annual salary minimum for exempt employees is $23,660, meaning you have to pay your employee at least that much in order for them to be exempt from overtime pay.   The Department of Labor has proposed increasing this minimum to $50,440 in 2016   This will have a huge impact on employers in every industry, increasing their labor costs either because of wage increases or additional overtime pay for newly non-exempt employees.   On the positive side, these changes may also encourage employers to be more mindful of excess hours worked by their employees, which ultimately should lead to better work life balance.   What can you do as an employer?   First, make sure your employees are classified correctly under the current minimums. You don’t want to end up with an expensive lawsuit for back pay.   Second, make an honest assessment of your employee’s work hours. Consider having your employees record their hours for a month to get an idea of the potential overtime costs.   Third, compare the cost of increasing your current exempt employee’s salary up to the proposed minimum versus paying them overtime. You can use this information to build a strategy for coping with a potential salary minimum increase.