On May 18, 2016, the US Department of Labor announced the publication of the final rule updating the overtime regulations of the Fair Labor Standards Act. The monumental changes will mean that an estimated 4.2 million employees in the United States that are currently exempt will become eligible for overtime pay later this year. Employers should be sure to review the salaries of all exempt level employees to ensure they are classified correctly by the effective date of December 1, 2016.
The new rule more than doubles the exempt level salary threshold from $455/week ($23,660 annually) to $913/week ($47,476 annually). Additionally, the salary threshold will automatically update every three years, based on wage growth over time. In response to the new overtime rule, employers have several options:
· Pay time-and-a-half for overtime work of those with salaries falling below the new threshold;
· Raise exempt workers’ salaries to above the new threshold;
· Limit workers’ hours to 40 per week or 8 per day or
· Some combination of the above.
For more information about the new overtime rule visit https://www.dol.gov/featured/overtime or contact Carleen Mitchell, PHR, SHRM-CP, APEI Administrative Manager for further assistance.