In 2014, President Barack Obama directed the Department of Labor to update the overtime regulations for exempt employees. The Intent was to simplify and modernize the rules to make it easier for worker’s and business owners to understand the new regulations and apply them.
A final rule was issued and is as follows:
The final rule will:
- Raise the salary threshold indicating eligibility from $455/week to $913 ($47,476 per year).
- Automatically update the salary threshold every three years, based on wage growth over time, increasing predictability.
- Strengthen overtime protections for salaried workers already entitled to overtime.
- Provide greater clarity for workers and employers.
There are a few months for employers to prepare, as the final rule will become effective on December 1, 2016. Please note that the final rule does not make any changes to the duties test for executive, administrative and professional employees.
For more information on the exemption tests for minimum wage and overtime pay provided by Section 13(a)(1) of the Fair Labor Standards Act as defined by Regulations, 29 CFR Part 541., as well as the DOL’s Guidance with the Overtime Final Rule, please visit our website for the publications.
As always, should you have any questions on this, feel free to contact Sally Saenz in the HR Department at (888)785-4018.