The New Overtime Law, and How It Could Affect Your Business

  • By Susan Burns
  • 26 May, 2016

On May 23rd, 2016, the U.S. Department of Labor published the final rule updating the overtime regulations for requiring employers to pay overtime to all eligible employees who work more than 40 hours per week.

President Barack Obama signed a Presidential Memorandum in 2014, instructing the Department of Labor to update the outdated regulations that affected white collar (exempt) workers regarding overtime and minimum wages. The purpose was to simplify and modernize the rules and make them easier to apply and understand.

With the new rules, announced on May 18th by President Obama and Labor Secretary Tom Perez, any worker who earns less than $47,476 must be paid overtime on any worked time over 40 hours per week.

Effective December 1, 2016, employers will have to:

-      Pay time-and-a-half for overtime

-      Raise workers’ salaries above the new threshold

-      Limit workers’ hours to 40 hours a week

-      A combination of the above


There are some exemptions to this law; for example certain sales, retail, or service employees who are paid on a commission basis; or agricultural workers who are paid a salary of at least $588 and whose employers gross $500,000 or more per year, or $477.75 per week for workers whose employers gross less than $500,000 per year.

Also, the minimum salary level will be increased every three years, beginning on January 1st, 2020.

How does the new law affect your company?

The first and obvious concern for business owners is the increase in labor costs. You need to consider what strategy may be most beneficial, both for your employees and your cash flow. Act cautiously, and don’t just raise everyone’s salary above the minimum or cut their hours to less than 40.

These new regulations are actually a gift. It gives you an opportunity to review your current operations and decide if you want to keep things as they are, or perhaps, streamline and become more efficient. Part of your analysis includes how you are currently using exempt staff. If they are working overtime, how much, when and why? Is it seasonal or continuous? How can you create efficiencies?

Your analysis should include not only if you are able to afford the new salaries, but also if you’d be able to keep up with them down the line. Also, be aware of the different scenarios that you could face if you convert your employees to non-exempt now or in the future. Keep your business needs in mind, and conduct a thorough analysis before making a sudden move that could hurt your entire operation.

Additional benefits of the new overtime rules include happier employees who are more productive. Having well-compensated employees, who don’t feel burnt out or exploited, means that they will be happy, satisfied employees. If they are happy, they will be more productive, which in the end is good for your company. However, as we said before, act carefully, and seek the advice of a savvy business counselor , before making big decisions.

Remember, you need to comply by December 1st, 2016. It is estimated that the new overtime law will benefit 4 million workers across the country. Let's   start working together   to define a plan that incorporates the new law and makes the most sense for your business growth.

You can find more information pertaining to Minnesota rules specifically in   this document , published by the Minnesota Department of Labor and Industry.


More Posts from Susan's Blog


By Susan Burns 26 Oct, 2017
P.S. There has been a lot of discussion on social media about my post on reading fine print  when installing apps, specifically focused on the Grammarly app. Some people have responded with the interpretation that Grammarly can only use your content to correct your grammar and not for anything else.

I disagree. This is not a correct interpretation, in my opinion.

Even though that interpretation may be based on a provision in the TOS that states you keep ownership of
your content, they still have an unlimited, perpetual, royalty-free right to use it. I won’t repeat the prior
post, but do urge you to read it .

Others have suggested that Grammarly’s TOS are typical of SaaS (software as a service) agreements and,
somehow, that makes it okay. The TOS may be similar, but the products aren’t. Grammarly, in my
experience, crawls through everything you type. Everything.

The other argument proposed by someone is that because this is typical SaaS language, they don’t really
mean that they are going to use your content. Really? Then say so in a clearly-drafted, user-friendly
contract a/k/a TOS.

I have not heard of someone successfully arguing in court that even though they agreed to a license of
their product, they didn’t think the person was really going to use it … and therefore, they shouldn’t be
allowed to use it. If you know of such a case, send it my way.

Again, legal ethics prohibit me from using the service. That aside, I don’t choose to give Grammarly
access to everything I type.

As one person put it, “everything ever typed on the computer, so while it runs in the background, it
gathers password, credit card data, shopping habits, text conversations from Facebook, messenger
services, anything you do... recorded and stored.”

Finally, my posts are my opinion and my legal analysis. I am not your lawyer. And, I am not telling you
what to do.

One of my major focus points with clients is clarity. Fabulous decisions come from clarity. Make a
decision that’s right for you.

I love a great discussion! Keep the comments coming.

By Susan Burns 24 Oct, 2017

Recently I was engaged in a Facebook exchange among a group of successful business women. Someone asked for opinions on using Grammarly—an app that is marketed as “A FREE, ACCURATE GRAMMAR CHECKER BUILT FOR EVERYONE.”  

The comments started rolling in: “love it!” “best thing I have used in a long time.” “Cuts my writing time significantly.” And more like that.

I actually had installed the free app a few weeks before to give it a test run. I found it to be a nuisance because that little app was popping up and sticking its grammar-nose in every single thing I wrote. My emails. My blog posts. My word documents. That spelled danger to me, and I immediately deleted it.

My curiosity piqued, I checked the Terms of Service (which, admittedly, I should have done first). Here is what I found:

By uploading or entering any User Content, you give Grammarly (and those it works with) a nonexclusive, worldwide, royalty-free and fully-paid, transferable and sublicensable, perpetual, and irrevocable license to copy, store and use your User Content (and, if you are an Authorized User, your Enterprise Subscriber’s User Content) in connection with the provision of the Software and the Services and to improve the algorithms underlying the Software and the Services. (emphasis added)

Here's what you need to know:

  • Grammarly, Inc. is a Delaware corporation. They include in the definition of “Grammarly” not only the corporation, but also all of its subsidiaries AND other affiliates.
  • The definition of “Software” is “the software.
  • The definition of “Services” is … wait for it … “services.” 
  • And, although it is poorly drafted, it seems to be attempting to include any future Software and Services provided by Grammarly, which you recall also means any subsidiary or affiliate.

What does this mean for you?

It means that if you install Grammarly, whether it’s a free service or a paid service, you are specifically giving an unlimited perpetual license to your content to Grammarly and any company they affiliate with and any of their subsidiaries basically for any service they provide now and decide to use in the future.

That means that if you use Grammarly, instead of your own brain or a copy editor, you are no longer the exclusive owner of your content. That means they can republish, provide to third party affiliates, and use your data and materials any way they see fit.

The bottom line is that Grammarly has access to—and the unlimited, forever—right to use your content. Period.

And, once you install Grammarly, it is everywhere . It pops up in every document you create. Every. Single. One. If you don’t believe me, try it yourself.

Of course, lawyers and other professionals with a confidentiality responsibility to their clients are ethically prohibited from using Grammarly. (And, I hope they read the fine print.) But even if you don’t have an ethical responsibility to keep information confidential, do you really want to give up the right to your content?

Think about it! And next time, read the fine print. … or call me, and I’ll read it for you.

‚Äč*This post has been updated here .

By Susan Burns 28 Feb, 2017

The driverless car industry is hot and super-competitive. That’s a given. Here’s what’s not hot if you are Waymo, the self-driving car business that was spun out of Google’s parent company:

By Susan Burns 19 Feb, 2017

Recently, there was a trademark spat between Adidas and Tesla. The story piqued my interest because   the big players make mistakes that are instructive for small businesses (only on a grander scale)—and because it illustrates the importance of brand identity and underscores why it’s smart to register your mark.

In a nutshell, here’s what happened: Tesla filed with the US Patent and Trademark Office (USPTO) to register its Model 3, three-bar logo as a trademark. If the registration had been for the purpose of using the mark on a car, there would not have been a problem. BUT, Tesla registered to use its three-bar “E” on clothing. Adidas, a company known for rigorous policing of its brand identity, challenged Tesla’s right to register the mark as confusingly similar to the Adidas three-bar logo. Tesla withdrew its application. Adidas protected its three-bar brand identity.
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