DOL Final Rule on Overtime
The Department of Labor has recently approved updated overtime regulations in regard to FLSA exempt employees. These new rules will take effect December 1, 2016.
These are the main changes the new updates will bring:
- Increase wage thresholds from a fixed dollar amount to a percentile of average salaried workers’ pay.
- Increasing salary minimums for regular and highly compensated employees.
- Tying future increases to inflation, indexing every three years. The first one to take place in 2020.
So what do those things really mean?
First, the employee has to meet three requirements to be considered FLSA exempt:
- The employee must be an executive, administrator, professional, or an outside salesperson .
- The employee must be paid on a salary or fee basis.
- (Current Rate-See Change Below) A regular employee must be paid at a rate of at least $455 per week or a highly compensated employee that makes a minimum of $100,000 per year.
The third requirement is the only one that will be changing on December 1, 2016. The new changes are as follows:
- Regular Employees: The salary rate for exemption is currently at $455/week ($23,660/year), the new rate is $913/week ($47,476/year).
- Highly Compensated Employees: The salary rate for exemption is currently $100,000/year, the new rate is $134,004/year.