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avoid paying overtime. In response to the new rule, you and your clients should take the following steps: • Review your workforce to determine which currently exempt employees are paid between $455 and $913 per week. • Identify which of these employees work more than 40 hours in a work week. You do not need to be concerned about employees who never work more than 40 hours in a work week because they will not be entitled to overtime even if they do not meet the new rule’s salary threshold. • Determine how to deal with employees who: (i) will no longer be exempt due to the new rule’s salary threshold and (ii) sometimes work more than 40 hours in a work week. These are the employees who will be affected by the new rule. Generally, an employer has three choices. It can simply pay overtime pay to employees who are no longer exempt. It can increase employees’ salary to the new threshold. Or, it can limit the number of hours employees work to less than 40 in a work week. Which of these options is preferable will depend on a variety of circumstances, including the number of overtime hours each affected employee works, and the employees’ respective salaries. During the comment period for the new rule there was a great deal of discussion about possibly excluding non-profit companies from the new rule. The comments focused on the fact that non-profits are likely to be particularly hard-hit by the new salary threshold because their salaries are typically lower than those paid by for-profit companies. The final version of the new rule does not exclude non-profits per se. However, non-profit organizations with annual revenues from “ordinary commercial activities” of less than $500,000 are not covered by the new rule. While it is not entirely clear what constitutes an “ordinary commercial activity,” it is clear that revenues from fund raising, membership fees, and other charitable activities are not the result of an ordinary commercial activity. There are numerous questions raised by the new rule that will need to be addressed by the courts and administrative rule making over the next several years. Stay tuned. Mr. Bell is a past president of the Berks County Bar Association and a shareholder of Stevens & Lee, P.C., where his area of practice is commercial and employment litigation and counseling.

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Summer 2016 | 13

The Berks Barrister | Summer 2016  

The Berks Barrister is the official publication of the Berks County Bar Association. www.berksbar.org. The Berks Barrister is published by H...

The Berks Barrister | Summer 2016  

The Berks Barrister is the official publication of the Berks County Bar Association. www.berksbar.org. The Berks Barrister is published by H...