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New Overtime Exemption Laws in 2016

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New Overtime Exemption Laws in 2016

A new federal overtime law signed into law by the president could potentially give millions of Americans a pay increase by raising the salary threshold for overtime exempt employees . The new overtime exemption law takes effect December 1st, 2016, and because of the law most hourly workers making less than $47,476 annually could be eligible for overtime pay under the Fair Labor Standards Act.

The last wage exemption threshold was raised in 2004 to $23,660. The president justified the increase due to years of economic factors like inflation taking its toll on American workers. The overtime exempt wage threshold could be updated every three years from now on based on certain economic factors to keep pace with changing conditions. Reports suggest less than 10 percent of the U.S. labor force qualifies for overtime based on job classification and salaries.

Over 4 million U.S. workers are expected to be affected by the change. Of that 4 million, almost half are restaurant and retail employees. Of those estimated 2 million, approximately 100,000 may get a $1,500 pay increase from their employer to put them over the overtime exemption threshold.

Conversely, one-third of salaried workers may now become eligible for overtime. The new overtime exemption laws may not be without their drawbacks, and employees should understand the implications, both positive and negative, of the change.

What does the new overtime salary laws mean?

The new overtime salary law could result in employees barely under the salary limit receiving a pay increase as a means of putting them over the threshold to disqualify them from getting overtime pay. Additionally, some currently salaried employees may only be asked to work a 40 hours work week but make the same amount of money; this would deny the chance to earn overtime pay, but would also allow more free time.

Disadvantages of the 2016 overtime pay change may include salaried workers being forced to take pay cuts and reclassified as hourly non-exempt employees and face reduced work hours to protect against overtime wage payments. Experts surmise employers may lay off salaried employees altogether and hire other low-wage workers as replacements.

Chicago area employment lawyers

If you are a salaried or hourly worker between the new and old threshold and have questions about how the law may affect you or if you believe your salary was not properly adjusted to conform to the new law, contact the Chicago employment lawyers of Goldman & Ehrlich. We are eager to assist you today.

Common Issues with Employment Contracts

When joining a new company, employees often have the power to negotiate over their contract to produce an agreement more favorable to their economic interests, and one that is fair to both sides. Employees may be in a particularly good bargaining position if they are experts or highly skilled in a particular employment field.

While navigating through the various clauses of an employment contract, prospective workers should take note of some of the most common issues with these agreements as they can have long term repercussions on the candidates’ earnings and prospects for advancement. As with most contracts, speaking to an experienced Chicago area employment contract attorney about the situation can greatly benefit the employee.


How much one gets paid is almost always the most pressing matter for the individual. However, there are many nuances to compensation, including:

  • Frequency of pay increases;
  • Possibility of signing bonuses for coming aboard a new company;
  • If bonuses will be available; and
  • If a base salary before bonus and commision can be reduced in certain circumstances.


Employers often attempt to sweeten an employment offer with benefits. In circumstances where employees are not offered the rate of compensation they expect, they may be able to bargain for certain benefits like:

  • Medical insurance;
  • Disability coverage;
  • Life insurance;
  • Pensions; and/or
  • Stock options.

Scope of employment

The scope of one’s employment can include much more than simply a job title and responsibilities. Included in the scope of employment portion of an employment contract the employer may be able to designate:

  • The place of employment and whether the employee can be relocated;
  • If the the employee can be demoted or have their responsibilities reduced or modified; and
  • If the employee will have influence over other facets of the company’s operations.

Grounds for termination and length of contract

How long a contract lasts and under what circumstances it may be prematurely terminated is among the most important of considerations. Employees should take the time to understand whether they are under “at will” employment or if they can only be terminated “with cause” for actions like:

  • Breach of contract;
  • Criminal charges; or
  • Refusal to perform reasonable duties.

Also, the contract may include arbitration and dispute resolution clauses for employee grievances.

Chicago area employment contract attorneys

Before you sign an employment contract, contact the Chicago area employment contract attorneys of Goldman & Ehrlich online or call 312.332.6733 for a consultation. Our office has years of experience serving clients throughout Cook County, Lake County, DuPage County, Will County, Kane County, and McHenry County.

Are Non-compete Clauses Legal in Illinois?

Along with negotiations over salary and benefits, employees may also bargain over non-compete clauses, which may limit their ability to work for “competitors” should they choose to move on from the company. Prospective employees should understand Illinois has laws pertaining to these agreements and restriction that may make them unreasonable and unenforceable.

When examining these clauses, some workers may ask if non-disclosure clauses are legal in Illinois. The answer is generally yes but with certain criteria that must be met. This includes:

  • The clause be no greater in scope than required to protect legitimate business interests of the company;
  • The agreement may not cause an undue hardship on the employee; and
  • The non-compete clause cannot cause harm to the public.

Furthermore, Illinois courts will generally give consideration to any geographic limitations the scope of the non-compete clause may carry and for how long. These considerations are not specifically listed in Illinois contract laws but they may fall under the undue hardship provision of the statute.

Am I supposed to be paid under a non-compete clause in Illinois?

Illinois law holds that the employee must be compensated (consideration) in some way in exchange for agreeing not to take his or her talents and inside knowledge of a company to a competitor. Illinois will also give special consideration to this aspect of the clause and determine if it is adequate for the employee.

The latter provision makes Illinois unique amongst states enforcing these agreements. In fact, inadequate consideration is fatal to claims by the employer and among the most important aspect of a dispute a court will examine before all else.

Are there time limits to Illinois non-compete clauses?

In Illinois, the employee generally must be employed by his or her company for at least two years for a non-compete clause to be valid. This usually holds true whether the employee leaves on his or her own accord or is released by the employer.

Additionally, the length a former employee may be subject to a non-compete clause after his or her departure under the general state guidelines for the agreements. Typically, there should be some end date where an employee may work for a competitor.

Chicago employment attorneys

If your employer asks you to sign a non-compete clause as part of your consideration for employment, contact the Chicago employment attorneys of Goldman & Ehrlich online or call 312-332-6733 for a consultation. Our attorneys will examine the claim and help you advocate for the best interests of you and your career.