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On December 1, 2016, a new rule change went into effect which significantly expanded protections to cover more than four million American workers who were previously exempt from overtime requirements. As the tax consultants at Sharrard McGee & Co PA in High Point, NC explain, small business owners should carefully review their payroll and employment policies to ensure compliance with new Federal regulations.

Under the previous rules, salaried workers were those who earned at least $455 per week or worked in a position classified as executive, administrative, or professional. However, the new rules, originally published in May of 2016, eliminate many of these exemptions, raising the minimum salary to $955 per week and requiring business owners to ensure all positions are categorized correctly.

Tax ConsultantSmall business and tax consultants encourage all business owners and entrepreneurs to review all employment practices immediately, since the penalties for failing to pay time-and-a-half for overtime hours may have serious financial consequences.

Business owners and entrepreneurs have only a limited number of options for adapting to the new overtime rules. Depending on the number of hours any particular employee works, raising the wages associated with a particular position may be less costly than paying overtime.

You may also elect to simply keep workers below 40 hours per week, side-stepping the issue altogether, or converting salaried employees to an hourly pay scale, especially if those workers don't actually have any administrative responsibilities or significant discretion on any aspect of their jobs.

The business and tax consultants at Sharrard McGee & Co PA pride themselves on staying abreast of the most recent updates to rules and regulations that may impact your operations. Visit their website to learn more about their comprehensive range of financial and tax planning services, or make an appointment with a member of their team by calling (336) 884-0410 today.

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