Managerial Employees Can Still Be Entitled to Overtime



Frequently, my clients think that every managerial employee is exempt from overtime. That assumption is dangerous and can lead to liability for overtime — particularly under the new overtime rule which will go into effect on December 1, 2016.

In determining eligibility for overtime, the first hurdle is not the duties performed by the employee.  Instead, look at their salary first.  Under the current regulations, almost every employee who earns a salary less than $23,660 is entitled to overtime — regardless of whether their duties might make them executive, administrative or professional employees under the Fair Labor Standards Act.  On December 1, 2016, that salary threshold will increase to $47,476.  Here’s a link to a previous post about the new rule:  Breaking News: Final Overtime Rule Released

So, if you have a manager making a salary less than $47,476, you will probably be required to pay them overtime starting December 1, 2016.   I strongly encourage you to conduct an audit/review of all of your employees to determine if they will be entitled to payment of overtime under the new rule.