Overtime Changes Coming to Hawai‘i

Sep 2, 2016

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Businesses across the country are preparing for a dramatic change in rules regarding overtime pay. Pacific Business News Editor in Chief A. Kam Napier has more on the impact in Hawaii.

In May this year, the U.S. Department of Labor issued a sweeping new rule regarding the issue of overtime for salaried employees. The biggest change is the pay threshold that determines whether a salaried professional employee qualifies for overtime pay, or is exempt from it. That threshold had been just under $24,000. Now it’s $47,476.

Businesses — and nonprofits too — have until December First to figure out how they’re going to handle what is the biggest increase to that threshold in 40 years.

To comply, businesses could increase an employee’s salary to beyond the threshold and local businesses we spoke to this week report they were doing just that for anyone already close to that number. Otherwise, for employees who fall between the old and new thresholds, employers must now track their hours as if they were hourly employees and pay time-and-half for any hours worked beyond 40 hours a week. Or not. Capping the hours worked to 40 is another option

For locally owned Wilson Care Group, this has resulted in hiring more people — but not nurses or social workers. Instead, it has had to hire an HR specialist to administer the timekeeping for many of its 500 employees. This business estimates that, all told, the new rule will set them back $350,000 a year in administrative and labor costs.

Business leaders we spoke to worry that gains for workers of this rule may be quickly diminished if businesses nationwide end up raising prices to afford the mandated overtime and raises.