On Wednesday, May 18, 2016, the United States Department of Labor published its much anticipated final overtime rules relating to the “white-collar” exemptions under the Fair Labor Standards Act. The rules will go into effect on December 1, 2016.
As before, employees may be exempt from overtime if they qualify for one of the so-called white-collar exemptions. Under the new rules:
- An employee must earn at least $913 per week, or $47,476 per year, in order to qualify for the executive, administrative, professional or computer employee exemption. This is an increase from $455 per week, or $23,660 per year.
- Employers will be permitted to use certain nondiscretionary bonuses and incentive payments to satisfy up to ten percent of the standard salary level.
- An employee must earn $134,004 in total annual compensation in order to qualify for the highly-compensated employee exemption. This is an increase from $100,000.
- The rules provide for an automatic update to the salary and compensation levels every three years, beginning on January 1, 2020.
While there was a lot of speculation about changes to the duties test in the proposed rules, the final rules did not make any changes to the duties test. Fortunately, employers have some time to implement the new rules but should begin working on implementation and compliance soon.
On Tuesday, June 28, 2016, Drummond Woodsum’s Labor and Employment Group is hosting an essential half-day workshop for employers to discuss how to implement these rules and to answer your specific questions. More information about this workshop will be coming soon.
