Federal Labor Standards and Your Small Business

Last year, the Department of Labor released a proposed rule change to the Fair Labor Standards Act (FLSA) regarding overtime wages for salaried employees which could affect the wages of up to five million Americans. The Columbus Chamber understands that these changes can have a dramatic effect on the financial health of your company, so we have created an outline that breaks down the proposed changes to the law and what it means for your business:

William McKelvey


Under current law, salaried employees who make less than $23,660 per year are subject to time-and-a-half overtime wages for any time worked in a week beyond 40 hours. Management, professional and administrative roles that earn below that threshold are exempt from this requirement.

In 2014, the White House called for the Department of Labor to review these thresholds, which had not been changed since 2004.

Proposed Changes

Following the president’s direction, the Department of Labor proposed changes in 2015 that would raise the overtime ceiling to $50,440 annually, and shrink the umbrella of exemptions for those that make under the threshold. To put it simply, an employee that makes under $50,440 annually, and does not perform a primarily managing role, would be subject to time-and-a-half for any time worked per week beyond 40 hours under the new rule.

The new salary level would also be subject to an annual increase to keep up with inflation and cost of living. There is no small business exemption to this requirement.

Actions Moving Forward

The final rule is set to be announced in summer of 2016, but the details have certainly not been finalized. The Department of Labor is currently reviewing the 300,000+ comments they received from the public following the unveiling of the initial proposal, and the final law will reflect much of that input. The Columbus Chamber will be keeping a sharp eye on new developments, as any changes to current law could have a large impact on businesses large and small, alike.

For more information and business resources, visit Columbus.org.