Hundreds of workers throughout the U.S. Virgin Islands may be eligible for overtime pay in 2017 after recent amendments to the Fair Labor Standards Act (FLSA) that go into effect on December 31, 2016.

In May, the U.S. Department of Labor published its revisions to the FLSA’s overtime exemption rules. The biggest change — and the one that will affect the most business owners across the nation — is related to minimum salary levels that employees must get paid to be exempt from national overtime requirements.

Now, any employees who make less than $913 per week (or $47,476 per year) are considered nonexempt from these requirements. The previous minimum had been just $455 per week ($23,660 per year), a standard set by the U.S. Department of Labor back in 2004.

This law affects anyone who works in a salaried position. It will have a particularly significant effect on white-collar positions, including administrative personnel, executives, creatives, marketing professionals and various other highly compensated employees. Employers are required to follow these new rules or else be subject to various penalties.

Preparing for the new rules

In the past, employers had been able to avoid paying overtime to most salaried employees because the minimums were so low. Now, they are going to have no choice but to prepare for these new rules in a way that both makes them compliant, while also keeping their books in order.

The following are a few strategies for employers in preparation of this change:

  • Identify any exempt employees who have a salary below the new $47,476 minimum. It’s important to determine if it is more expensive to pay those employees overtime or increase their pay over the minimum.
  • Create plans for employees who will remain exempt, including new compensation and benefit packages. When bringing employees to the new minimum salary, consider if you are going to raise base pay or provide commissions or bonuses — or do some combination of the two.
  • Any employees to be reclassified as hourly will need a new hourly rate established. But remember that not every position qualifies for hourly classification.
  • Make sure nonexempt employees who were not previously nonexempt know how these changes affect their day-to-day work. They will now be in charge of recording their hours, requesting overtime, taking meal breaks and obeying other policies.
  • Communicate why you are making the changes so employees do not look at the reorganization as a demotion or punishment. Be completely upfront about the changing rules nationally and how you came to make the decisions you did.

For more information and guidance on how you can better prepare for the changes coming as a result of these FLSA amendments, meet with an employment law attorney.


Ravinder S. Nagi is Chair of the Labor & Employment Practice Group at BoltNagi PC, a trusted and established labor law firm, assisting businesses and organizations throughout the U.S. Virgin Islands.