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Do Your Employees Get a Mandatory Raise This December 1?

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If your business is covered by the Fair Labor Standards Act (FLSA), you may be required to give all of your salaried employees who perform executive, administrative or professional (EAP) duties a raise.

As of December 1, 2016, the new minimum wage for full-time salaried workers is $913 per week. Previously, the minimum wage was $455 per week.

December 1, 2016 is a Thursday, so this change will need to be made based on the payroll period that covers December 1, and it may be mid-pay period.

In the event that your EAP employees are paid commissions or other incentive-based pay, you can count those payments for up to 10% of the minimum salary amount, so long as these amounts are paid at least quarterly.

Any employees considered highly-compensated employees (HCE) under the FLSA must now be paid a minimum of $134,004 a year, as of December 1, up from $100,000 annually, previously.

It may be time to require existing salaried employees to begin tracking their time or shift salaried employees to hourly with the prospect of paying overtime instead of the increased salary, and this is an analysis we can help you to best understand and then roll out to your employees.

If you need help identifying whether your business is covered by these rules and which of your employees are exempt EAP employees or HCE’s under the new rules, contact us. That’s why we are here. There are significant costs if you make this analysis incorrectly, so let us help.

This article is a service of Kundani & Chang LLP. We are an award-winning law firm that specializes in business and estate planning for clients like you. The goal for every family is to stay educated on all topics like this, avoid probate, avoid estate taxes, and build a legacy for you and your loved ones. What sets our firm apart is that we build lasting, lifelong relationships with our clients. They rely on us to keep them updated, provide sound legal counsel, and be there for them immediately if any problems should ever arise. The best part is we don’t charge hourly fees to our families, so you never have to worry about speaking to us. If you’re ready to keep your family out of Court, contact us today to schedule an initial consultation or visit our website at www.kckwlaw.com

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