Thanks to recent regulations issued by the Department of Labor, more salaried workers will receive overtime pay, beginning in December of this year. Previously, the Fair Labor Standards Act of 1938 guaranteed that anyone making a salary of $23,660 or less annually was entitled to overtime pay (at 1.5x time) for any hours beyond the 40-hour workweek. The DOL’s new rule doubles that threshold to $47,476.
Those employees making above the new threshold, up to $134,004 annually, are exempt from receiving such overtime, provided they fall into such categories as “executive, administrative and professional”. While this is a huge upgrade to the overtime law generally, the particulars of the ruling will still depend on a firm's size and location.
According to Archinect’s Salary Poll, the average annual salary for anyone 30 or younger (regardless of title, license, experience or any other variable) in architecture in the U.S. is $50,859—pretty close to that overtime threshold. For anyone negotiating salary, it might be savvier to stay under the overtime threshold if you know you'll be logging more than 40 hours of work a week.
Here's the AIA's handy breakdown of how the DOL's overtime ruling is likely to affect architects:
How does the new rule affect who gets overtime?
Every full-time, salaried employee making less than $47,476 annually (or $913/week) will now be eligible for overtime pay.
What impact will this have on design firms?
Due to the threshold for professional employees, many architects won’t be directly impacted by the new threshold - but that doesn’t mean that firms won’t feel the effects. Even if every design professional in your firm is already earning above the new threshold, there are likely support staff and others to consider (and whose weekly hours you might need to start tracking closely).
Will the threshold be raised again in the future?
Under the rule, the salary threshold will be updated every three years, based on wage growth over time.
When will the change happen?
The increase goes into effect December 1, 2016.
What can my firm do to start preparing?
Planning is key. December 2016 will be here in no time; firms need to ensure they are not caught off guard. Consider how other related businesses, like those with which your firm subcontracts, might be impacted by new labor costs, and incorporate that into future business projections.
The AIA's complete posting can be found here.
Peruse the DOL’s fact sheet here.
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