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Easytrack Payroll
Payroll & HR Services in Boulder & Denver, Colorado
Payroll & HR Services in Boulder & Denver, Colorado


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UPDATE: Overtime Rule for Salaried Exempt Employees

August 31, 2017, Federal Judge Amos Mazzant struck down the Obama administration's 2016 rule that more than doubled—from $23,660 to $47,476—the minimum annual salary required to qualify for the Fair Labor Standards Act's "white collar" exemptions. Last November, the same court blocked the overtime rule, but had not yet declared it invalid.

Employers don't have to make any changes. The order is a final ruling.

However, employers should prepare for an eventual increase to the exempt salary threshold, even though it isn't clear what the final number will be. The rumors are in the $30Ks somewhere.

That means the existing overtime regulations apply for now, which is as follows:

To be considered “exempt,” employees must meet three (3) requirements:

1. Minimum Salary Threshold

$455 per week or $23,660 per year.

Base salary must meet minimum threshold. (i.e., does not include Bonuses or Commissions).

Highly Compensated Employee (HCE) Salary Threshold: $100,000 per year.

2. Paid on Salary Basis

Cannot reduce pre-determined pay amount based on quality of work or quantity of work (number of hours worked).

Full salary due, if any work (no matter how few hours) is performed in the workweek.

3. Duties Tests


Primary duty is management of the business.

Directs work of two (2) or more employees.

Authority to hire/fire/make recommendations.


Primary duty is office/non-manual work.

Directly related to management or general business operations.

Exercises discretion and uses own judgement.

NOTE: A “clerical” position where the employee is given specific orders or lists of work to carry out, does not qualify as Administrative.


Learned: Advanced knowledge, education required

Creative: Artistic, imaginative

Outside Sales:

Primary duty is making sales, obtaining orders/contracts for services.

Employed away from the employer’s place of business.

Computer Workers

Computer and related work

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If you have salaried employees, you need to read this as salaried exempt employees must now be paid at least $47,476 per year starting December 1, 2016.

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If you have Salaried employees, you need to read this.

Final regulations regarding the proposed minimum salary increase for exempt employees will be released by July 2016.

The proposed minimum salary increase is $970 per week ($50,440 per year), up from the current level of $455 per week ($23,660 per year).

No changes are proposed for the “salary basis test” or the “duties test”.

For more details click here...

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Take a look at this short video.

It explains what the Colorado Green Building Guild is doing to help local green businesses and individuals build sustainability for the future.

A Tip on Doing Tip Pooling

Here's a good tip and a reminder to be careful about requiring tipped staff to share their tips with non-tipped staff such as kitchen help. If you do this, the tipped employees have to make at least the standard minimum wage, which in Colorado is $8 per hour.

Here's what a recent audit by the DOL (Dept of Labor) found:

Hawaii Restaurant Pays Back Tips to Servers
Castle Resorts and Hotels Inc., which operates the Kauai-based Bull Shed restaurant in Hawaii, returned $55,674 in tips and $2,959 in minimum wages to 17 servers for violating the wage provisions of the Fair Labor Standards Act. Wage and Hour investigators found the company reduced the cash wage of tipped employees below the minimum wage of $7.25 per hour (Hawaii's standard min wage). The employer unlawfully required servers to pay a portion of their shift tips to non-tipped hourly kitchen staff who were already paid at least the full minimum wage. "We appreciate this employer's full cooperation in resolving this matter," said Terence Trotter, the division's district director in Hawaii. "Employers cannot take a credit against their minimum wage obligation to tipped staff when they required a portion of those tips to be shared with traditionally non-tipped staff such as kitchen employees." - DOL

Last week, Sen. Tom Harkin (D-Iowa) proposed the Restoring Overtime Pay for Working Americans Act.

This is a HUGE potential change that will negatively impact small and mid-size businesses and how they schedule their employee's work hours as well as limit employee flexibility. For example, take tax preparers who work many additional hours during the tax season (these would be required to have overtime pay under the new Act), but then they get a lot of time off during the summer, so it evens out - the old idea of "comp time". This Act would make it expensive for the employer to pay out overtime that they would otherwise not pay during tax season and then the employee would only get paid for a few hours worked during the summer since they are taking a rest break during that time. My opinion is I hope it doesn't pass.

Federal Bill Proposed to Extend Overtime to More Workers

by Tina Harkness, Esq., SPHR on 06/23/2014 12:50 pm
Category: Wage & Hour

Last week, Sen. Tom Harkin (D-Iowa) proposed the Restoring Overtime Pay for Working Americans Act, a bill that would make more workers eligible for overtime by raising the salary level required for employers to classify workers as exempt employees under the Fair Labor Standards Act (FLSA). The bill has been referred to the U.S.  Senate Committee on Health, Education, Labor, and Pensions for further review.

The bill would more than double the current salary level requirement for exempt employees of $455 per week or $23,660 per year to $1090 per week or $56,680 per year in increments over three years. The threshold would be indexed to inflation after that. The bill would also gradually increase the salary threshold required for workers to meet the Highly Compensated Employee exemption from $100,000 to $125,000 per year, and then be indexed to inflation.

The bill also deals with the “primary duty” requirement for exempt employees. Formerly, primary duty was understood to mean that the worker performs exempt functions at least half of each workweek. However, 2004 regulation changes eliminated the 50-percent threshold. Harkin’s bill would reinstate the 50-percent threshold.

Finally, the bill would enact penalties for employers who violate the FLSA’s recordkeeping requirements. The penalties would be similar to those currently faced for minimum wage or overtime violations.

This bill is separate from the U.S. Department of Labor’s efforts to revise the FLSA’s overtime regulations called for by the president in March of this year. Earlier this month, the DOL announced that it expects to issue proposed regulations in November 2014.
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