At the beginning of the year, small business owners must begin complying with changes in the federal overtime rule. The minimum salary for the overtime exemption will rise from $23,660 annually to $35,568 annually. That means employers have to pay time-and-a-half for executive, administrative, or professional employees who make less than $35,568 for any work done beyond 40 hours per week.

The Department of Labor estimates that the change affects 1.3 million employees, raising the cost of compensation for the affected businesses. The cost would have been a lot higher had NFIB not stepped in with a lawsuit that blocked the Obama administration from raising the overtime threshold salary to $47,476. The new Trump administration increase was meant to be a compromise.

Affected NFIB members should double-check to make sure they are in compliance. The Labor Department found 11,018 overtime rule violations in 2019, forcing payment of millions in back wages. Don’t make a mistake and find yourself on the hot seat.


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