By Macky Weaver
On January 1, 2020, the final overtime rule for Florida employers went into effect, making over 1.3 million workers eligible for overtime pay. This amendment might also mean a hike in costs for Florida business owners, depending on the types of workers they employ.
Per the U.S. Department of Labor (USDOL), these changes were long in discussion and formalized in September, last year. Specifically, the new regulations will increase the earning capacity of many employees who were previously classified as “exempt” or were unable to earn overtime pay.
The USDOL’s new rule bumps the salary threshold from $455 per week (since 2004) to $684 per week (equivalent to $35,568 per year).
Florida Overtime Law – The Final Rule
Florida employers need to comply with the Fair Labor Standard Act (FLSA) which establishes, “minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments.”
The new rule:
- raises the minimum salary requirement for white-collar exempt employees to $684 a week, from a previous high of $455 a week.
- increases the current-enforced compensation level for “highly compensated employees” (HCEs) from $100,000 to $107, 432 per year.
- revises the particular salary threshold for employees in the motion picture industry and workers in U.S. territories.
Employers, however, can pay non-discretionary bonuses, commissions, and other incentives annually, amounting to 10% of the total annual compensation level for their employees.
Florida’s Minimum Wage and Overtime Laws
Florida’s wage laws are subject to change every year based on inflation. While the federal minimum wage remains at $7.25 an hour, Florida’s new minimum wage will increase to $8.56 per hour in 2020 (from $8.46 per hour in 2019).
Florida overtime laws follow the Federal labor laws without any state-specific exemptions. That means all non-exempt employees who work for more than 40 hours per week must be paid ‘overtime pay’ of time and a half for any extra hours worked during a workweek.
Also, there are certain employee exemptions from this requirement based on the duties they do perform, and not as mentioned in their job description.
Common exemptions include:
- Computer Employee
- Outside sales
Other than this, the new regulation also allows for employer-led discretion on overtime pay, such as additional pay for work completed on vacations, nights or weekends.
How Employers Can Move Forward Now that the Final Overtime Rule is Here
The recent changes give overtime entitlement to previously exempt employees. Salary may be the primary consideration for overtime eligibility, but it’s not the only factor at play. To test whether the employee is exempt, look at their specific job duties. The job title may say one thing, but employees may be performing functions other than those expected of the title.
Steps to Ensure Compliance
- Consult a legal advisor to determine whether performing a particular set of duties can make an employee an exemption to the law.
- Review the salaries of your employees and determine who is eligible under the new federal regulation.
- Depending on your business objectives and your particular situation, you can either:
- Increase the minimum salary levels and maintain the employees’ exempt status. If you have eligible employees that frequently work overtime, this option could be less expensive.
- Pay appropriate overtime to low-paid (exempt or nonexempt) employees.
Discuss these options with your employees and find out their preference to work out an arrangement.
- Plan for other ways to cut overall costs:
- Hire a few more employees so you can distribute the responsibilities and avoid asking them to work overtime.
- Reschedule your employees more efficiently, so they do not need to put in more hours.
- Evaluate other areas of expenditure and cut down the costs, if possible, to compensate for overtime pay.
Begin Planning Now
If you have decided to pay overtime to your newly nonexempt employees:
- You should maintain thorough records to track such newly nonexempt employees’ work hours, the extra time they put in, and their job classification.
- The records must typically cover accurate employee information, such as the hours worked and wages earned.