McGowanPRO Professional Liability Blog / Resources / Articles

Is your firm prepared for the New Overtime Pay Rules?

Posted by Gary Sutherland on Fri, Nov 18, 2016 @ 11:41 AM

On December 1, 2016 the overtime rules for "white-collar workers" will take effect.

Effective December 1, 2016, executive, administrative, and professional employees making less than $47,476 per year are entitled to be paid overtime, including salaried employees. This salary level will be updated every three years, beginning January 1, 2020. Prior to December 1, 2016, the “exempt from overtime” salary threshold was $23,660.

 Learn more about the impact on employees and employers.

There is a strong likelihood that wage and hour claims will increase in 2017.

The most common FLSA offenses for small businesses include:

  • Not paying overtime for time worked over 40 hours in a week
  • Misclassifying managers and assistant managers as exempt
  • Paying lump sum amounts for overtime hours worked vs. paying 1.5 times the normal hourly rate
  • Not paying for overtime since it had not been pre-approved
  • Allowing employees to “waive” their rights under the FLSA

Claims will come not only from the misclassification of employees, but from non-exempt employee allegations such as:

  • Not being paid properly (incorrect overtime payments)
  • Being forced to work "off the clock"
  • Not being given sufficient meal and rest periods
  • Pay equity issues

Now is the time to be certain your firm is protected with Employment Practices Liability Insurance (EPL) - with coverage for violations of the Fair Labor Standards Act (FLSA)!

NAPLIA offers FLSA coverage with  an Employment Practices Liability policy from Mount Vernon Insurance Company, an A+ rated carrier with AM Best:

  • $100,000 sublimit for costs of damages and defense for claims alleging violation(s) of the FLSA (wage and hour)1

1 Subject to underwriter approval.


Rob Ferrini | Program Manager | NAPLIA

Direct: 508.656. 1327 |Toll Free: 866.262.7542, ext. 1327


Tags: employment