New overtime rule in effect December 1 (Unless court postpones itÄ)
The new overtime rule from the U.S. Department of Labor is scheduled to take effect December 1, 2016. The WANADA Bulletin has previously covered the ruleês provisions, particularly in the special issue on the WANADA Dealer Law Briefing earlier this year.
A federal court in Texas however, may postpone the December 1 effective date if it opts to review DOLês action on changing overtime rules. The court in Texas is expected to rule this week, which WANADA will promply report in conjunction with NADA.
The new rule dramatically increases the salary level that must be met for white collar dealership employees to be exempt from overtime pay. The rule does not change the duties test for white collar employees. The revision raises the threshold for white collar employees executive, administrative, professional and computer from $23,660 to $47,476 per year. General office workers, managers, assistant managers, shop foremen, computer specialists, warranty clerks and others in administrative or managerial positions may be affected.
Dealers should re-evaluate their white collar employees and make sure they are still exempt from overtime. If they are eligible for overtime under the new rule, a dealer has several alternatives:
« Change the job to one paid on commission, not salary.
« Split the job between two people.
« Raise the employeeês salary so he or she is exempt from overtime.
« Pay overtime under the law. Make sure the employee clocks his or her hours accurately.
Download Bulletin PDF