Watch out for new overtime requirements!

In the US and here in Oregon, employees must receive appropriate minimum wage ($9.25 from January 1, 2016 to December 31 — this will raise on New Year’s Day, so keep your eyes peeled) and overtime (time and a half after 40 hours worked in a workweek), unless an employee is ‘exempt’ from those two laws.

But of course, why wouldn’t every employer declare every employee to be exempt from those laws? Fewer timecard requirements, fewer records to keep timely. So, under the law, everyone is assumed to be a non-exempt hourly employee unless the employer can establish to the contrary that the employee falls into particular categories based on (1) the employee receiving a minimum of $455 per week and (2) the employee’s duties.

Today, the US Department of Labor increased the weekly minimum salary necessary for an employer to classify an exempt employee up to $913 a week. This brings an exempt’s annual salary minimum base up to $47,476. This rule will become effective December 1, 2016 — you’ve got six months to prepare! In short, starting December 1, if you have an employee you currently classify as exempt who is earning an annual salary of $35,000, you can either give that employee a $12,476 raise; you can tell that employee to not work more than 40 hours a week; or you can start paying the employee appropriate time and a half.

This minimum weekly salary will increase every three years beginning in 2020.

But don’t forget the second half of the analysis — the DOL isn’t saying that any employee earning $50,000 doesn’t qualify for overtime. You still must have the appropriate duties assigned to that employee. The employee must have a bona fide administrative, professional, or executive function in your business. Each of those has specific tests.

For executive employees, for example, the employee’s primary duty must be managing the company or a recognized department or subdivision of the company; must customarily and regularly direct the work of at least two or more full-time employees; and must have the authority to hire or fire other employees.

For administrative employees, the employee’s primary duties must be performing office or non-manual work directly related to the management or business operations of the employer or its customers; and must include the exercise of discretion and independent judgment on matters of significance.

A learned professional employee must have a primary duty of performing work requiring advanced knowledge, in a field of science or learning, customarily acquired by a prolonged course of specialized instruction, and must also exercise discretion and judgment. A creative professional employee must have a primary duty performing work requiring invention, imagination, originality, or talent in an artistic or creative field.

There are other exempt employees that this rule does not address, including computer professionals and salespeople. This rule touches traditional white collar employees.

If you have classified any employee in your winery or tasting room as exempt, you have over six months to analyze whether that classification should continue. Be sure to carefully weigh all the factors so you don’t improperly violate wage and hour laws.