How to Prepare for the New Overtime Changes

By Katherine Muniz
November 15, 2016

As you hopefully know, starting on December 1st, effectively 4.2 million workers currently exempt from earning overtime will be qualified to earn overtime due to the “Final Rule” passed by the Department of Labor (DOL) on May 16th, 2016. By definition, an individual is currently exempt from earning overtime if he or she meets all of the following three conditions:

  • Performs executive, administrative, or professional job duties
  • Is paid on a salary basis
  • Is paid at least $23,600 per year (or $455 per week)

While the first two conditions have not changed, started in December the salary threshold will be raised to $913 per week or $47,476 per year.


Based on the DOL’s “Overview and Summary of Final Rule” it is stated that all salaried employees earning below the threshold are eligible for overtime, regardless of the duties test. “With the new, higher threshold, 8.9 million overtime-eligible salaried workers—and their employers—will be able to determine more easily than they should be receiving overtime pay.

Because their salaries are below the new threshold, their employers will no longer have to figure out whether they pass the “duties test,” and they will no longer have to wonder if that test has been applied appropriately.” Faced with new obligations, small businesses are re-strategizing their business operations. If this affects you in any way, the time to prepare is now, as you may need to make some changes in order to comply.

Reorganizing your company

In less than a month, you will need to establish a system to determine when overtime is owed, which means tracking the time of these employees, even if they’re salaried. Employees can stay on a salaried basis but you will still need to track their time to determine when they are owed overtime pay. If you’d like, you can switch them to work on an hourly basis to simplify calculations. Regardless of whether you decide to continue paying the affected employees as salaried, or transition them over to hourly, you will want to begin tracking their hours to accurately determine when overtime is due.

Time Tracking

Chances are that you’re already using a time clock software to track your company’s time. However, if you’re new to the process, you may be surprised at how complex time tracking can be. There are many considerations to make, including how you’ll record and document worked time, and calculate and allocate those hours. With remote employees and employees in different shifts, departments, or locations, overseeing time and attendance become even more difficult. On top of that, each pay period you will need to either import the time data into your payroll system which can be very time-consuming or manually calculate the payroll which is prone to human errors.


That’s why a software solution that encompasses both time tracking and payroll becomes the most effective solution. Your administrative burden is decreased, your timesheet data becomes payroll data within seconds, and your costs are consolidated into one flat fee. Our newly updated platform, FingerCheck360, offers a variety of clock-in options, automated time tracking, and syncing time data into payroll, so all the work is done for you. If your company is affected by this new overtime rule it’s a no-brainer to switch over to FingerCheck360.

One Unified Platform

FingerCheck360 our all-in-one payroll software seamlessly joins time tracking and payroll, with one system, one vendor, and one fee. Employers can provide their employees with a wide range of clock-in methods for accurate and simple time tracking, and employers can manage it all online. Overtime gets automatically calculated, and timesheets become payroll data that can be managed during the payroll process. Employees are paid exactly what they earned, whether it be regular pay or overtime. You can implement one unified time tracking/payroll system to track your employees’ hours, approve those hours, and process payroll all from one software and even from your mobile app.

In an age where wage and hour lawsuits are reaching record highs, Attorney Michael A. Semanie of Killgore Pearlman Stamp Ornstein & Squires says, it’s more important than ever to play by the rules and conduct your business in total compliance with the law.

“The pace at which both wage and hour law and technology are currently developing is arguably more rapid than it has ever been at any time in the past,” says. “It has never been easier to report a claim of unpaid wages than it is now.”

According to Semaine President Obama’s directive to raise the minimum salary level for executive, administrative and professional employees to be exempt from overtime pay from $455 per week to $913 per week results are changes that will affect millions of employees and will significantly impact U.S. businesses.

In the wake of the new overtime rule changes, never before has the pressure been so strong to accurately record every individual employee’s hours. Employers can no longer escape reporting duties by paying their employees a salary.

The best way businesses can comply with the new requirements is to find a system that allows them to track overtime and process those hours with ease.

To determine how FingerCheck360 can help your business implement the new overtime rule, sign up for a 30-day free trial on our official webpage, or contact us for more information.

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