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Businesses Get Schooled on New Labor Rules Mandating Overtime Pa - KOAM TV 7

Businesses Get Schooled on New Labor Rules Mandating Overtime Pay for Salaried Employees

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CARTHAGE, MISSOURI -

Area businesses prepare for changes in Department of Labor rules for overtime.

     What could mean more money for salaried workers, could create headaches for businesses.  And the cost could come at the expense of the jobs themselves.

Race Brothers Farm and Home Supply in Carthage has many employees who put in more than forty hours a week.  But now those on salary will qualify for overtime pay, like their hourly counterparts under Department of Labor rules that take effect December 1, 2016.

 Roy Mason with Race Brothers said, "It’s just a confusing law. We need some clarity.  What's considered work, what's not.

So the Carthage Chamber of Commerce hosted a lunch Thursday with accounting experts offering answers. The Fair Standards Labor Act raises the minimum salary of those exempt from overtime to forty-seven thousand dollars a year. 

Brian Schmidt with Schmidt Associates explained, "That doesn't mean they have to start paying people the minimum salary of forty-seven thousand. They just have to have an overtime component to their salary if they expect people to work more than forty hours in the work week."

That often applies to  convenience store and fast food managers who Schmidt said can work 50 to 70 hours a week.  So even they could be forced to punch a time clock in the future.

Wendy Mashburn with Payroll Vault advised, "They are gonna have to start documenting, if not currently having a time keeping system, having to  have employees time in and out."

Officials at Race Brothers asked questions about buying trips, where employees are gone for a weekend. It is  documentation that creates an administrative headache that they'd like to avoid.?

Mason said, "It may be cheaper to bump a few people up to that level then to go through the process of administering if we're in compliance. It will be a decision we'll have to make.  We really don't want to demoralize people and move them back from salary to hourly." 

But Kelly Hook, the owner operator of Comforcare Home Care said, "There’s no way I can bump people up to that salary. There's just no way. So, I now have to decide now whether I use part time people again and cut everybody's hours to part time, which I don't think is great for the employees."

And while the goal is to guarantee those who work overtime hours get paid for it, for some businesses, the cost could lead to cutting positions altogether.  Comforcare cut one job when overtime was mandated for home care workers earlier this year.

Hook said, "You got to get that money somewhere.  I work in the senior  industry.  I’m not in a situation where I can just bump up my rates to accommodate this."

Accounting experts say businesses have a number of options on dealing with the new rules.

For a link to the overtime rule changes click here:

http://www.adp.com/semlps/flsa/downloads/2016-flsa-rule-changes-520.pdf

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