Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: July 6, 2016
The Firm
201-896-4100 info@sh-law.comAs speculated on our BusinessLaw blog, the U.S. Department of Labor recently made a major announcement to increase the minimum weekly wage level for salaried workers eligible for overtime pay. According to National Law Review, as of Dec. 1, companies across the U.S. will face significant changes in payroll. In fact, the salary threshold will increase from $455 to $913 per week, which breaks out to nearly $47,500 per year – up from close to $24,000 annually.
So how do companies adjust? There will likely be a jump in wage and hour lawsuits, which have been on the rise over the past decade. This increase could not only significantly increase the damages and attorney’s fees for defense expenses, but these costs can also exceed the amount of wages in dispute. These extra expenses will come as the result of claims available under the Fair Labor Standards Act.
With these increases in potential liabilities coupled with the increases in overtime pay, companies will need to adjust their compensation levels.
Companies with workers that will be impacted by the new overtime pay rules will need to figure out how to adjust their total compensation. This may include a number of different options, most notably increasing salary levels for those workers so that they reach exempt status.
For many companies, this might not be a feasible option. These firms may decide to convert salary workers to hourly levels to be divided by the standard 40 hour work week. Another option is converting workers from salary to hourly, and then dividing this by the total hours worked in a week.
Another alternative would be to convert workers from salary to fluctuating workweeks. This would effectively enable a company to pay an employee for only hours worked. Some weeks would be less hours, while others would be more.
Finally, an option that companies have is to offer non-discretionary bonuses or commission packages for workers. The new regulations allow these companies to pay up to 10 percent of the new minimum salary amount. This would effectively allow a company to have a worker under non-exempt status but compensate the employee for overtime pay under a commission structure for more work on fewer hours.
Employers need to determine the economic impact of the new rules on executive, administrative and professional-level employees within their organizations. There are alternatives for companies to convert their workers to exempt statuses or shift their compensation schedules for fear of incurring significant increases in overtime pay.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Using chattel paper to obtain a security interest in personal property is a powerful tool. It can ensure lenders have a legal claim on collateral ranging from inventory to intellectual property. To reduce risk and protect your legal rights, businesses and lenders should understand the legal framework. This framework governs the creation, sale, and enforcement […]
Author: Dan Brecher
For years, digital assets operated in a legal gray area, a frontier where innovation outpaced the reach of regulators and law enforcement. In this early “Wild West” phase of finance, crypto startups thrived under minimal oversight. That era, however, is coming to an end. The importance of crypto compliance has become paramount as cryptocurrency has […]
Author: Bryce S. Robins
Earlier this month, the U.S. Supreme Court issued a decision in Ames v. Ohio Department of Youth Services vitiating the so-called “background circumstances” test required by half of federal circuit courts.1 The background circumstances test required majority group plaintiffs pleading discrimination under Title VII of the Civil Rights Act to meet a heightened pleading standard […]
Author: Matthew F. Mimnaugh
Special purpose acquisition companies (better known as SPACs) appear to be making a comeback. SPAC offerings for 2025 have already nearly surpassed last year’s totals, with additional transactions in the pipeline. SPACs last experienced a boom between 2020–2021, with approximately 600 U.S. companies raising a record $163 billion in 2021. Notable companies that went public […]
Author: Dan Brecher
Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process that involves important corporate governance considerations. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, […]
Author: Dan Brecher
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
Author: Brian D. Spector
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!