FAYETTEVILLE -- The rules on who gets overtime pay for working more than 40 hours a week are changing in about three months, and area chambers of commerce are trying to help businesses get ready.
Starting Dec. 1, companies have to pay employees in management, executive or high-skilled positions at least $47,476 a year, or $913 a week, in order to give those employees a salary instead of hourly pay and exempt them from overtime. The U.S. Department of Labor announced the change in May, bumping the minimum salary level up from $23,660 a year.
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To learn more about the Department of Labor’s changes to overtime rules and who is and isn’t exempt from overtime pay, go to www.dol.gov/whd/ove…
Several business groups complained of the change, saying it demanded too much too fast or could lead to lost jobs by dragging more money toward payroll. But the early alarm at the rule change has largely faded around the state, and most businesses she's heard from don't expect to fold or lose employees because of it, said Angela DeLille, director of governmental affairs for the Arkansas State Chamber of Commerce.
"I think right now we're past that; we're just at, 'OK, what do we need to do?'" she said at a seminar Thursday about the rule change put on by the Fayetteville and state chambers. "They just don't want to make a mistake."
The change doesn't affect workers who aren't in those leadership positions and get overtime pay anyway, nor does it affect salaried employees who spend 40 hours a week or less at work. But it will bring changes for managers, computer specialists and others who make salaries between $23,660 and $47,476 while regularly clocking in more than 40 hours.
What those changes will be is essentially up to employers, said Stuart Jackson, an employment lawyer and partner at the Wright Lindsey Jennings firm who spoke at Thursday's seminar. About 20 business owners and nonprofit members turned out to hear his thoughts and ask questions.
"You've got several options," Jackson told the group. For instance, employers could boost an affected employee's salary up to the minimum level or otherwise start paying specifically for the overtime the employee works, which would mean more income for the employee. They could also adjust someone's overall compensation so that they'll make the same amount even after their typical overtime hours are included, minimizing the impact on a business' expenses.
Whatever companies decide, they should make sure they've met the job requirements for giving someone a salary instead of hourly pay, Jackson said.
"Bottom line is, if they don't fit in an exemption, you have to pay them overtime," he said.
Tim Maddox, principal at Fayetteville's deMx Architecture, said Jackson's talk helped affirm his own research into the issue during the past several weeks, and he hopes to use Jackson's presentation to get the rest of the firm more familiar with it.
Three of the firm's eight employees will be affected, and Maddox said he expected the firm would adjust their pay and tweak their workloads so that they'd make about the same income with less overtime.
"For us, we're going to have a little bump in the road, but it's not going to be significant," he said of the rule change, though he added doubling the federal salary level is a lot to handle all at once.
The Obama administration set the new level under the Fair Labor Standards Act, the Great Depression-era law that also created the minimum wage and barred child labor except under certain conditions. The Labor Department said the change was necessary because the level hadn't been adjusted since 2004 and needed to go up by tens of thousands of dollars to keep up with inflation over the past several decades. The salary level will be adjusted every three years starting in 2020, the department said.
"It has been something like 12 years since this has been adjusted, so it's probably time. I think people were a little shocked by the amount," Jackson said.
The Arkansas chamber has gone to Little Rock and Fort Smith with events to help businesses learn about the changes and will soon head to Jonesboro, North Little Rock and elsewhere, DeLille said.
NW News on 08/26/2016