A New Federal Payroll Law That Impacts Every Company—Including Yours!

So, I was wrong on my prediction that the New England Patriots would repeat as the Super Bowl champ. So what? Everyone deserves a second chance. And here’s mine.

Effective January 1, the federal statutes have made a change regarding the paying of overtime wages to employees. In the past dozen years you could place a person earning over $23,660 on salary and avoid paying them overtime. The new wage number for 2020, and going forward, is $35,568, or $684 per week.

What this means is that when you have a person on a base salary lower than $684 per week, they must be paid overtime for 40 or more worked hours per week No getting around it. If an office clerk makes $30K then this person earns overtime pay. A new glazier whom you are paying $17 per hour earns overtime (O/T). You can’t get around this in any way for employees. If a person works for you on sales commission, and you pay a base of $25K, and they don’t earn commission during the year, they get O/T. If their commission takes them over the top, then they don’t get the O/T.

Part-time folks are included in this regulation. Anyone who works for you on a direct basis is covered. So talk with your bookkeeper or payroll department to make sure they are aware of this change and are following it. You may want to raise people’s salaries above the cap to avoid the O/T.

The biggest wrong thing to do is to ignore this and hope your employees don’t become aware of this. If even one person knows it and feels they have been wronged by you, they will tell everybody and one phone call to the Department of Labor will bring in an audit team and no one likes that, ever.

Lastly, the good news: pitchers and catchers report to the New York Mets to begin spring training. It doesn’t get better than thinking about baseball.