If your real estate investing business has any salaried employees, you could find yourself paying them some serious back-overtime in 2017 if a recently blocked Labor Department ruling is overturned in the New Year. Late last month, the U.S. District Court for the Eastern District of Texas issued an injunction against a ruling from the U.S. Department of Labor. The ruling would have expanded the number of workers eligible for overtime pay. Automatically hiking those same workers’ salaries every three years moving forward. The ruling was supposed to go into effect Dec. 1, 2016.
The Labor Department ruling would have required all salaried employees designated as executive, administrative or professional staff to be paid time-and-a-half for any hours worked over 40 hours a week. If they earned less than $47,476 annually and in some cases, if they earned less than $134,004 annually.
While this might not seem particularly relevant to real estate investors at first since many parties in the sector tend to be independent contractors. But the National Association of Realtors (NAR) noted it would affect office staff, salaried employees working for brokerages, state and local real estate associations.
The ruling has been blocked for now. But if the Department of Labor opts to fight the injunction, employers could owe back-overtime to eligible employees starting from the original date of implementation. This means real estate investors with salaried employees eligible for overtime under this ruling, will not only need to track activity related to the case but also track overtime hours carefully. This is to ensure that they have the means to pay should the Department of Labor triumph in its pursuit. That would mean 4.2 million workers not presently eligible for overtime pay could become eligible if the ruling eventually goes through.
About the Author
Carole VanSickle Ellis serves as vice president of research and analysis at the Self-Directed Investor Society, helping investors “declare independence from Wall Street.” Contact her at firstname.lastname@example.org or visit sdiradio.com.