New Overtime Laws: How Your Construction Or Field Service Company Needs to Adapt

By ClockShark | 4 minute read

On December 1st 2016, the United States Labor Department will finalize new overtime regulations. As a business owner, you might be concerned about how this will affect your workforce. You want to comply with the new overtime laws, but you might not know exactly what they are.

How do you know which of your employees are exempt from overtime pay, and which ones fall within the rules and regulations to opt into time-and-a-half wages after 40 hours?

What you need to know about the new overtime regulations
There are a couple key points every business owners in the construction business need to understand.

First and foremost, this will not affect all of your workers. Many of your field service workers – tradesmen, laborers, installation specialists – will not be impacted because they are already allowed overtime pay. The employees that will be affected are your salaried staff members that make less than $47,476 per year.

Your administration and sales teams’ salaries will – more than likely – need to be revised. For example, if your receptionist is making less than the new threshold ($47,476 per year), then you’ll need to either 1) give them a raise to keep them salaried, or 2) move them to hourly pay.

If you do move a majority of your workforce to hourly pay, make sure to invest in an employee time clock for construction app like ClockShark to streamline your payroll. This will help eliminate mistakes and keep your employees honest once they make the change to hourly pay.

Below is a list of common construction business positions, and some general information on exemptions according to the U.S. Department of Labor.

Executive Exemptions

We’ll start with the managerial team. These are the people who are considered “senior” level employees, manage your operations team, or are in charge of project planning and implementation. Your executive level team members will be exempt from the new overtime rule if:

  • They are paid on a salary basis, and their rate is not less than $455 per week
  • Their primary duties are managing specific departments, subdivisions of workers, or the enterprise (company)
  • They direct or manage the work of two or more full-time employees
  • They have hiring and firing authority, and hold weight when considering employee advancements, promotions, or other changes to an employee’s status quo

Administrative Exemptions

Now we’ll move onto the administrative team, or the “gatekeepers” of your business. These are admin assistants, receptionists, and other members of your office team. They will be exempt if:

  • They are paid on a salary basis, and their rate is not less than $455 per week
  • Their primary duties are office related to management or general business operations (non-manual), or their duties are customer service related
  • They exercise discretion and independent judgment when dealing with matters of significance

Blue Collar Workers

Blue collar/field service workers are the heart of any construction business. These are the men and women who are deployed onto sites to finish projects. For the most part, these workers are already eligible for overtime wages.

  • This should be in effect regardless of their earning levels.
  • These are non-management employees who perform operational tasks involving physical skill and energy
  • FLSA-covered employees, production, maintenance, construction and similar occupations such as carpenters, electricians, mechanics, plumbers, ironworkers, craftsmen, and operating engineers

Outside Sales Exemption

Because these positions are largely incentive driven and commission based, there are only 2 clearly defined rules:

The new overtime rules will be in effect this coming December (2016). The US Department of Labor has put together an overtime rule fact sheet. This will help business owners understand the requirements needed for workers to be eligible for overtime wages under the new rule. Study this. Have a clear understanding of which employees will be affected when working more than 40 hours, and which employees will be exempt from the new overtime laws.

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