Dept. of Labor Releases Final Overtime Regulations

Posted on May 20, 2016 by NMCA

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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 40^th 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)	1^st 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.

Category: Federal, RegulationsTags: Labor, Northern Michigan Chamber Alliance, Overtime rules, US Dept of Labor