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What Do the New FLSA Exempt Pay Laws Mean for Fitness Business Owners?

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Melissa Knowles, VP of Gym HQ, a ClubReady CompanyMelissa Knowles, VP of Gym HQ, a ClubReady Company

Just when you thought that navigating the landscape of wage and hour laws was challenging enough, another mountain to climb has popped up on the horizon! On May 18th, the Department of Labor announced major changes to the standard salary level for employees classified as exempt. Under this new ruling, the salary threshold increases to $913/week ($47,476 per year) from $455/week ($23,660 per year). It was also announced that the DOL intends to automatically update the threshold every three years to adjust it to scale with exempt wage earners in the 40th percentile of the region with the poorest salary demographics (currently the south).

As the new law goes into effect on December 1, 2016, business owners have some time to decide what adjustments should be made to their pay policies and staff structuring in order to comply. Employers can:

  • Raise exempt employees' salaries above the new threshold.
  • Switch exempt employees to hourly and limit their hours to 40 per week.
  • Pay time-and-a-half (double time in some states) for overtime work.
  • Some combination of the above.

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