On May 18th, 2016, the US Department of Labor (DOL) released a final rule that radically increases the thresholds for overtime rules, expanding the number of employees eligible for overtime pay. Under the Fair Labor Standards Act (FLSA) employees who work more than 40 hours in a week are entitled to overtime pay, unless they meet the requirements of certain wage and duties tests thereby making them exempt from the overtime and minimum wage rules. These rules apply to employees whose jobs are classified as administrative, professional, executive, highly compensated, outside sales, and computer professional The new rule doubles the minimum salary threshold from $455 per week to $913 per week (which amounts to $23,660 annually to $46,476 annually) and raises the exemption level for those considered to be “highly compensated employees” from $100,000 to $134,004 annual salary. This DOL rule may impact major business decisions like hiring, expansion, offering new benefits or more flexible work arrangements for employees, and possibly even require reductions at your company. Companies will have until December 1, 2016, to make determinations on which employees to reclassify as nonexempt and implement the changes.
We have supplied these rules for informational purposes. If you have further questions, please contact your outside HR consultant, Payroll Provider or legal representative who specializes in labor.