All small businesses should be aware of the new labor laws that have been recently introduced in the USA. These laws are set to come into effect at some point this year and it’s important to know what they entail, so you can make sure your business will be compliant with them and not get hit with unexpected fines or fees for breaking any of the new rules.
This guide covers everything you need to know about the new labor laws in the USA, from what they are and why they exist to how your business will be affected by them and how you can avoid being penalized for non-compliance.
When are overtime pay laws different?
The most important overtime pay change involves exempt employees. Previously, only those workers earning $23,600 per year or less could be classified as exempt from receiving overtime pay.
Now that this salary threshold has been raised to $47,476 per year ($913 weekly), more of these employees will now be eligible for compensation during their work hours when they’re required to work more than 40 hours in a given week.
The new rule also removes an exemption for managers and administrators from paying overtime even if they have salaries that are above the new threshold of $47,476.
What are the new requirements under FLSA?
There are three main changes being implemented by FLSA that can affect you and your business:
- Increasing the salary threshold to USD$47,476/year,
- Updating the weekly hour requirement,
- Providing new workday overtime rules.
This means that most employees are now eligible for overtime pay after they work more than 40 hours in a week, or 8 hours a day.
Additionally, the new law requires employers to maintain detailed records on employee hours worked each day.
Can I still request my employee to work overtime without paying them extra?
Most workers are eligible for overtime pay under FLSA. Here’s what you need to know:
- Part-time employees may be exempt from overtime pay if they work less than 16 hours per week, although some exceptions apply.
- The salary threshold at which employers are no longer required to pay overtime wages is $455 a week or $23,660 a year.
- The rule entitles nonexempt workers (those not covered by an exemption) to one and one-half times their regular hourly wage for hours worked beyond 40 each week. This additional payment applies only if an employee works more than 40 hours during a workweek.
When am I required to provide breaks for an employee?
On a daily basis, an employee must be given at least one break (20 minutes) during the work day. It is considered a necessity that this break be unpaid, although you can offer additional breaks if desired.
- An employee is entitled to one rest break lasting 20 minutes if they are working between 3.5 hours and 6 hours;
- two such breaks if they are working between 6 and 9 hours; and
- three such breaks if they are working over 9 hours.
- In addition, there will be a 30-minute lunch break when an employee has worked more than 5 hours without eating.
What are some potential penalties I could face from breaking FLSA rules?
Penalties are serious consequences, such as jail time and high fines. Violating FLSA rules is a federal offense and could result in criminal penalties. Employers who willfully violate any provision of FLSA may be imprisoned for up to six months for each violation.
Violations that involve willfulness or show a pattern of willful violations can lead to imprisonment for up to one year.
Conclusion
Every day new legislation comes out and gets everyone asking what is going on. What does this mean for me? What does this mean for my business? Sometimes it is easy to get lost, with all of the different changes and adjustments made.
This month has been no exception. Recently, there have been several amendments that changed things within different sectors of work and labor.
Read about what has changed for those working as contractors, those who are on parental leave or those who need to use flexible work arrangements.
Some of these changes may apply directly to you, others may not – but either way we’re here so you can find out more!