Final DOL Rule Updating Overtime Regulations
Since last June, we have been writing about the much-anticipated new overtime exemption rules. Today, President Barack Obama and U.S. Secretary of Labor Thomas E. Perez announced the publication of the Department of Labor’s final rule updating the overtime regulations.
The Final Rule focuses primarily on updating the salary and compensation levels for Executive, Administrative and Professional workers to be exempt. These workers currently qualify for exemption from overtime if they make at least $23,660 per year ($455 per week). The new rule will raise the exemption threshold to $47,476 annually ($913 per week). The new rule means that those previously working in salaried positions that were considered “exempt” from overtime, but who earned less than $47,476, will either have to receive a salary increase to the new threshold or be reclassified as hourly employees, resulting in overtime pay for those workers.
Another provision of the new rule raises the total annual compensation requirement for highly compensated employees from $100,000 to $134,004.
In addition, the new rule establishes a mechanism for automatically updating the salary and compensation levels every three years.
The new rule will take effect December 1, 2016. Although efforts to block or delay this measure are being proposed, employers should not wait to plan for mandatory implementation. Employers should also consider proactive measures that can be taken to minimize the negative impact and legal exposure to their business.
If you need help with planning for compliance with this new overtime rule, please feel free to call any member of the ScottHulse Labor and Employment legal team.
THIS INFORMATION IS PROVIDED AS A COURTESY – NOT AS LEGAL ADVICE. Please know that we are raising the above issues as a courtesy and for informational purposes only. It is not intended as a substitute for legal advice concerning a particular situation that may be affecting your business.
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