In October 2015, 23.7% of US high school students age 16-19 had jobs. Where are these young people working? According to Bureau of Labor Statistics data, industries in accommodation and food services (e.g. restaurants, hotels), retail (including grocery and food stores) and arts, entertainment and recreation (including amusement parks) see the highest numbers of youth workers. These tend to be companies looking for entry-level, minimum wage and temporary workers, maybe even yours. 

The Fair Labor Standard Act (FLSA) final rule on overtime was to take effect on December 1, 2016. Last fall, we explained the changes and gave some tips for compliance. Then in September, a lawsuit was filed to challenge the final rule. What’s happened since then? Let us bring you up to speed.

Although anticipated FLSA overtime rule changes have been put on hold, almost half of the United States will increase their state minimum wages in 2017. So, as an employer, what does that mean for you?

The Fair Labor Standards Act (FLSA) establishes the federal minimum wage, which is currently $7.25/hour ($2.13 for tipped employees). However, FLSA also stipulates that state or local laws supersede FLSA rules if the state or local laws are more favorable to the employee. In other words, employers must pay the state minimum wage if the state minimum wage is greater than $7.25/hour. And, as previously mentioned, almost half the country will increase state/local minimum wage in 2017. The table below highlights the minimum wages you can expect in 2017.

• The House of Representatives passed a bill on September 28, 2016 that would delay FLSA changes for six months. However, H.R. 6094 is unlikely to be signed into law before December 1, if ever.
• On September 20, 2016, 21 states filed a lawsuit, joining the Chamber of Commerce, the National Federation of Independent Business, the National Retail Federation and other business groups, alleging the changes are unconstitutional. According to the Society for Human Resource Management, however, these lawsuits are unlikely to move forward. 

So - what's an employer to do? The experts agree - prepare for the FLSA changes as if they are indeed going into effect December 1. 

As we said, the Department of Labor (DOL) recently unveiled the newest addition to the Fair Labor Standards Act, a law that has been updated multiple times over the last several decades. With the new rule, the DOL raises the minimum salary threshold for overtime exempt workers within companies with over $500,000 in annual revenue. The two main types of salaries are:

1. Exempt from overtime (these employees don't qualify for overtime)
2. Non-exempt from overtime (these employees do qualify for overtime)

Although many employees believe they belong to the first group, salary exempt, a lot fall under the salary non-exempt category. This is usually because they do not fall under the true definition of a manager (see the What It Boils Down To section below).

What is the Work Opportunity Tax Credit, also known as WOTC? According to the US Department of Labor, the WOTC "is a Federal tax credit available to employers for hiring individuals from certain target groups who have consistently faced significant barriers to employment." These target groups include:

According to the DOL, key provisions of the proposed rule aim to:

1. set the standard salary level at the 40th percentile of weekly earnings for full-time salaried workers ($921 per week, or $47,892 annually);
2. increase the total annual compensation requirement needed to exempt highly compensated employees (HCEs) to the annualized value of the 90th percentile of weekly earnings of full-time salaried workers ($122,148 annually); and
3. establish a mechanism for automatically updating the salary and compensation levels going forward to ensure that they will continue to provide a useful and effective test for exemption.