I understand that many doctors have numerous items to concerns themselves with and that often Human Resource compliance is the last thing on their mind.

However, with this new law signed by Obama, you will need to pay attention as it DRASTICALLY changes the landscape of wages paid in America and is going to affect the mass majority of employees and employers.

As most are aware, there are employees titled EXEMPT and NON EXEMPT.

NON EXEMPT employees are paid an hourly wage. If they work over 40 hours per week, you must pay them overtime.

EXEMPT Employees are paid Salary. You are not required to pay them overtime payments and they may work well over 40 hours without earning any extra wage.

There have always been tests to determine if you qualify for Exempt status , in addition to the testing criteria to qualify for salary status, an employee also had to be paid a minimum of $455 per week or $11.38/hour.

THIS IS WHERE THE MAJOR CHANGE IS!!!

EFFECTIVE DECEMBER 1, 2016, IN ORDER TO QUALIFY FOR EXEMPT STATUS - BE PAID A SALARY WITH NO OVERTIME - YOU AS THE EMPLOYER MUST PAY THEM AT LEAST $913 PER WEEK OR $22.83/HOUR.

This means - that unless your Office Manager or Director or any other salary employee (hopefully not your front desk) - is making at least $913 per week OR $47,476 Annually from you - YOU NEED TO START PAYING OVERTIME.

I will outline a related portion of the criteria to qualify for exempt status below.

Please contact me with any questions.

Executive Exemption

To qualify for the executive employee exemption, all of the following tests must be met:

The employee must be compensated on a salary basis (as defined in the regulations) at a rate not less than $913 per week;
The employee’s primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise;
The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and
The employee must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.

Administrative Exemptions

To qualify for the administrative employee exemption, all of the following tests must be met:

The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $913 per week;
The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and
The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

Professional Exemption

To qualify for the learned professional employee exemption, all of the following tests must be met:

The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $913 per week;
The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment;
The advanced knowledge must be in a field of science or learning; and
The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

To qualify for the creative professional employee exemption, all of the following tests must be met:

The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $913 per week;
The employee’s primary duty must be the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.

DEPARTMENT OF LABOR FACTSHEET, SHOULD BE UPDATED AFTER DECEMBER 1ST: https://www.dol.gov/whd/overtime/fs17a_overview.htm

A NOTE ON THE FINAL RULE: https://www.dol.gov/WHD/overtime/final2016/

On May 18, 2016, President Obama and Secretary Perez announced the publication of the Department of Labor’s final rule updating the overtime regulations, which will automatically extend overtime pay protections to over 4 million workers within the first year of implementation. This long-awaited update will result in a meaningful boost to many workers’ wallets, and will go a long way toward realizing President Obama’s commitment to ensuring every worker is compensated fairly for their hard work.

In 2014, President Obama signed a Presidential Memorandum directing the Department to update the regulations defining which white collar workers are protected by the FLSA's minimum wage and overtime standards. Consistent with the President's goal of ensuring workers are paid a fair day's pay for a hard day's work, the memorandum instructed the Department to look for ways to modernize and simplify the regulations while ensuring that the FLSA's intended overtime protections are fully implemented.

The Department published a Notice of Proposed Rulemaking (NPRM) in the Federal Register on July 6, 2015 (80 FR 38515) and invited interested parties to submit written comments on the proposed rule at www.regulations.gov by September 4, 2015. The Department received over 270,000 comments in response to the NPRM from a variety of interested stakeholders. The feedback the Department received helped shape the Final Rule.

Key Provisions of the Final Rule

The Final Rule focuses primarily on updating the salary and compensation levels needed for Executive, Administrative and Professional workers to be exempt. Specifically, the Final Rule:

Sets the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South ($913 per week; $47,476 annually for a full-year worker);
Sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test to the annual equivalent of the 90th percentile of full-time salaried workers nationally ($134,004); and
Establishes a mechanism for automatically updating the salary and compensation levels every three years to maintain the levels at the above percentiles and to ensure that they continue to provide useful and effective tests for exemption.

Additionally, the Final Rule amends the salary basis test to allow employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.

The effective date of the final rule is December 1, 2016. The initial increases to the standard salary level (from $455 to $913 per week) and HCE total annual compensation requirement (from $100,000 to $134,004 per year) will be effective on that date. Future automatic updates to those thresholds will occur every three years, beginning on January 1, 2020.

ADP PAYROLL COMPANY ALSO HAS A NICE EXPLANATION OF THE NEW RULE HERE: http://sbshrs.adpinfo.com/flsa