By Mark R. Filipp

Employees that fit within an exemption, (typically executive, administrative and professional employees) and are paid a sufficient salary, do not have to be paid overtime under federal law.  Although historically, the amount of salary that was necessary to maintain the exemption was modest, ($455 a week or $23,660 per year), effective December 1, 2016, employers must now pay these employees a salary of at least $913 per week, or $47,476 per year to maintain the exemption.  That means that if they are paid less, they must also be paid overtime for hours worked in excess of 40 hours during a work week. If you have an employee that you consider an exempt employee currently paid a salary less than $47,476 who is currently working overtime, rather than raising the employee’s salary, you can transform the employee’s pay to an hourly rate that will pay the employee roughly the same amount, even with the payment of overtime. If you have employees that are affected by this change, please contact Mr. Filipp at 248.619.2580 or mark.filipp@kkue.com.



For further information regarding these matters, please contact Mr. Filipp at 248.619.2580 or via email.