BOLI Changes Manufacturing Overtime Laws

Retro-Effective on January 1, 2017

Overtime now must be calculated daily AND weekly starting January 1st.

Mills, factories and manufacturing businesses are liable for a daily overtime requirement: in addition to the normal over 40 hours per week pay requirements that apply to other business types, manufacturing businesses are required to pay 1.5 times’ the employee’s regular rate of pay for hours that exceed 10 hours in a single workday.

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New calculation requires payment of both.

For many years, BOLI reconciled those two rules by requiring mills, factories and manufacturers to calculate both daily and weekly overtime, and to pay employees the greater of the two amounts. However, in late December 2016, BOLI changed its interpretation of the statutes to require the payment of both daily AND weekly overtime.

Will companies have to retro-actively re-calculate payroll already paid in 2017 and pay additional overtime to employees?

It appears BOLI plans to enforce the re-interpretation retroactively – effective on 1/1/17. While it’s also up in the air as to if BOLI’s new standard CAN BE enforced, we do not advise employers to use the “wait-and-see approach” since wage and hour violations carry potential statutory penalties and attorney fees on top of the unpaid wages. If you have further questions, contact us regarding your particular situation.