Dept. of Labor Releases Final Overtime Regulations

 

Earlier this week, the U.S. Department of Labor released their final rule that makes changes to overtime pay regulations under the Fair Labor Standards Act. Below are some quick highlights and resources.

Some highlights:

  • $47,476 annually ($913 weekly) salary threshold for exemption to overtime pay
  • Effective December 1, 2016
  • Future automatic updates to salary level to occur every three years, beginning on January 1, 2020. Will automatically update to maintain 40th percentile of full-time salaried workers.
  • No changes to duties tests (for determining if employee completes executive, administrative or professional duties within the organization)

 

Society for Human Resource Management resource page: https://www.shrm.org/legalissues/federalresources/pages/overtime-rule-hub.aspx

 

Current regulations (2004 until effective date of Final Rule, 2016) 1st Draft of Rule Final Rule
Salary Level $455 weekly $970 weekly (if finalized as proposed)

40th percentile of full-time salaried workers nationally.

$913 weekly

40th percentile of full-time salaried workers in the lowest-wage Census region (currently the South)

Highly Comp. Emp. (HCE) Total Annual Compensation Level $100,000 annually $122,148

90th percentile of full-time salaried workers nationally

$134,004

90th percentile of full-time salaried workers nationally

Automatic Adjusting None Annually, with requests for comment on a CPI or percentile basis Every 3 years, maintaining the standard salary level at the 40th percentile of full-time salaried workers in the lowest-wage Census region, and the HCE total annual compensation level at the 90th percentile of full-time salaried workers nationally.
Bonuses No provision to count nondiscretionary bonuses and commissions toward the standard salary level Request for comment on counting nondiscretionary bonuses and commissions toward standard salary level Up to 10% of standard salary level can come from non-discretionary bonuses, incentive payments, and commissions, paid at least quarterly.
Standard Duties Test See WHD Fact Sheet #17A for a description of EAP duties. No specific changes proposed to the standard duties test. Request for comment on whether the duties tests are working as intended. No changes to the standard duties test.

 

 

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