On Wednesday, May 18, 2016, the United States Department of Labor (DOL) published its much anticipated final rules regarding the "white-collar" exemptions from overtime under the Fair Labor Standards Act (FLSA). The rules will go into effect on December 31, 2016 and expose employers covered by the FLSA to new overtime pay obligations.
Whether the FLSA applies to Indian nations and their enterprises remains a murky question, but the DOL has taken the position that it does. So if tribes fail to follow the rules, they could be sued by the DOL.
Here are the highlights of the new rules:
- The salary level triggering overtime pay exemptions for executive, administrative, professional or computer employees is going up. Employers covered by the FLSA will be free from overtime pay obligations to such employees only if only they earn more than $913 per week, or $47,476 per year. This is an increase from $455 per week, or $23,660 per year.
- Employers covered by the FLSA will be permitted to use certain nondiscretionary bonuses and incentive payments to satisfy up to ten percent of the standard salary level.
- The salary level triggering overtime pay exemptions for "highly-compensated" employees will go up from $100,000 to $134,004 in total annual compensation.
- The rules provide for an automatic update to the salary and compensation levels every three years, beginning on January 1, 2020.
