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Source: Bob Evnen, Woods & Aitken LLC, 09.2016 | Keywords: Policies, Overtime]

The U.S. Department of Labor has issued a new rule raising the salary floor for white-collar overtime exemptions to $47,476 per year. The new salary floor becomes effective on December 1, 2016. The current salary floor is $23,600.

This change will have no effect on the overtime exemption that applies to many employees of ag equipment dealers. Under current law, “any salesman, partsman or mechanic primarily engaged in selling or servicing…farm implements” is exempt from overtime pay if their employer is “primarily engaged in the business of selling such vehicles or implements to ultimate purchasers…”

These exemptions were not changed by the new regulations.

The new salary floor applies to the white-collar overtime exemption, which covers executive, administrative and professional employees.

Dealers should pay attention to three important details:

  1. The equipment dealer exemption only applies if the dealer is primarily engaged in selling farm implements.
  2. The exemption applies only to sales representatives, parts personnel and mechanics.
  3. Dealers should evaluate whether they are paying salary with no overtime to their office administrative staff and management staff. If so, the new salary floor will apply on December 1.

Have questions? Call Bob Evnen on the toll-free I-NEDA HR Helpline at (855) 277-5575.