Businesses want their workers to contribute to a company financial success. Yet, workers are expensive and can also serve as a source of operational liability. Employers have to pay wages that conform with current wage laws. They also that need to uphold workplace safety regulations and other employment statutes.
Small mistakes on the part of a company can lead to legal and financial liability. If employees believe that a company violated their rights or broke the law, they may try to take legal action against the company where they work. Wage and hour lawsuits can lead to a court order that forces a business to pay workers an additional amount beyond the paycheck already issued.
A recent change in federal regulations might mean that more companies are at risk of wage lawsuits brought by frustrated employees in the near future. Specifically, more salaried workers may soon have grounds to pursue a wage claim against an employer.
Minimum salary requirements have increased
Many companies offer salary pay to keep operating costs predictable. Salaried employees are often exempt from overtime rules. Even if a company has them come in on a Saturday or stay a few extra hours occasionally, the employer may not need to offer additional pay.
Hourly workers have an automatic right to overtime pay when they put in more than 40 hours per work week. Salaried workers only qualify for overtime wages in certain circumstances. A large number of workers with salary pay might soon be eligible for a wage lawsuit against their employers.
The minimum salary necessary to exempt a worker from overtime pay recently increased. On July 1st, 2024, the minimum salary for an exempt worker increased from $35,568 to $43,888. There is a second increase scheduled to take effect on January 1st, 2025. At that point, workers earning less than $58,656 may be eligible for overtime pay.
Companies may need to rework their scheduling practices, increase the salaries they offer and/or start budgeting to pay overtime wages for workers with lower salaries. The failure to track modifications to the law and change company practices as employment laws evolve can leave a company at a major financial disadvantage.
An overtime wage lawsuit brought by workers can cost a company thousands of dollars and damage its reputation. Tracking changes in employment law to comply with all regulations is crucial for businesses that rely on the knowledge or services of employees to function.
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