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New Overtime Pay Rules

On May 18, 2016 the Department of Labor released a final rule that significantly increases the overtime exemption thresholds, resulting in an expansion of the number of employees eligible for overtime pay.   The Fair Labor Standards Act (FLSA) entitles eligible workers to overtime pay for all hours worked in excess of 40 hours per week, unless they meet the requirements of certain wage and duties tests.  Exemption thresholds are in place for various types of employees resulting in certain classes of employees being exempt from overtime rules.  The new rule doubles the minimum salary threshold for certain “white collar” salaried workers from $455 per week ($23,660 per year) to $913 per week ($47,476 per year).  This effectively means that “white collar” salaried workers under the new $47,476 annual threshold are now eligible for overtime pay.  The new rule also raises the exemption level for those to be considered exempt from overtime as a “highly compensated employee”.  This new threshold is $134,004 per year, up from $100,000.  The new DOL rule is effective December 1, 2016 and will impact an estimated 4.2 million workers.   The new rule also establishes a mechanism to automatically update the salary and compensation levels for exempt employees every three years.  Now is the time to assess whether your business has employees that are no longer exempt from overtime.   We can help you analyze the effects of the new overtime-pay rules.   Give us a call if you need assistance to guide you through this change and help you plan for the future. (859) 231-1800

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