1. Compliance Now!
The New Overtime Rules Presenter: James S. Ganther, Esquire Mosaic Compliance Services

2. This program is for informational purposes only, and is not intended to constitute legal advice or the practice of law. Participants are referred to their own local counsel for any actual legal advice they might require.

3. A Brief History of Overtime
From Creation until 1938:
Workers got paid for the hours they worked. Simple.
From 1938 – November 30, 2016:
Workers get paid 1.5x wage for every hour over 40 in a workweek.

4. A Brief History of Overtime
Why 1938?
Great Depression in full swing
Unemployment rate was 19%
Response was to hire more workers to work fewer hours

5. A Brief History of Overtime
But there were exceptions:
Salaried
Paid more than a certain level (currently $23,660/year)
Primarily executive, administrative, or professional duties (“white collar”)
Let hospitals and law firms overwork interns and associates

6. A Brief History of Overtime
Highly Compensated Employees (HCE)
Paid more than $100,000/year
Companies with less than $500,000 in annual revenue are exempt.

7. A Brief History of Overtime
Commissioned Salespeople:
Employed at a retail/service establishment
Regular rate of pay must exceed 150% of minimum wage in weeks in which overtime was worked
More than 50% of earnings must be from commission

8. Changes: The New Overtime Rules
Salary exemption level goes up to $44,476/year ($913/week)
Still primarily administrative, executive or professional duties
HCE exemption level goes up to $134,000
Commissioned Salesperson exemption unchanged

9. The Law of Unintended Consequences
The New Overtime Rules
Intent:
Give 4.2 million people a raise
Reality:
Disappoint 4.2 million people
Add burdens to their employers
The Law of Unintended Consequences

10. How Dealers Can Respond:
The New Overtime Rules
How Dealers Can Respond:
Limit/prohibit overtime
Reduce benefits
Less generous healthcare
Less PTO
Give raises
Get employee compensation above thresholds

11. Change worker status The New Overtime Rules
Turn salaried workers into hourly
Example: Salaried worker making $38,000/year who works 50 hours/week
Base wage of $13.29/hour for 40 hours
O/T wage of $19.94/hour for 10 hours
Equals $38,000/year
Otherwise, $14,250 raise

12. Switch 2 PTEs for one 50-hour FTE New contracts for salaried employees
The New Overtime Rules
Switch 2 PTEs for one 50-hour FTE
Drops below ACA requirement
New contracts for salaried employees
Set salary for up to 50 hours/week
Time and a half for 10 hours/week
Not allowed in Alaska, California, Connecticut, Hawaii, New Mexico and Pennsylvania

13. Fire people Do nothing New Overtime Rules
Make remaining employees work harder
Add robots
Do nothing
Increase employee compensation
Raise prices to cover the cost
Only works in a monopoly

14. Two lawsuits pending to overturn rules Bill pending to overturn rules
The New Overtime Rules
Take effect December 1, 2016
Assume they will go into effect
Two lawsuits pending to overturn rules
Bill pending to overturn rules
Penalties include 300% fine, plus interest
Stay tuned and keep your lawyer on speed dial

15. Thank you for your time! Questions? Diamond Award Winner
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