New Overtime Rules Released

This morning, the Department of Labor released its final rule regarding the White Collar Exemptions.   I am still working through the over 500 page document but post now to share a few of the most important details.

The new rule is expected to affect over 4 million workers in the United States, who will now be eligible for overtime unless their compensation is restructured.  The rule goes into effect on December 1, 2016, which is a longer preparation time than previously expected.  The salary requirement increases from $455 per week to $913 per week ($47,476 annually), just over twice the current salary requirement.  A new provision would allow up to 10% of the salary requirement to be met through bonuses and commissions as long as they are paid at least quarterly.  This provision was not anticipated by the business community and may make it easier for the exemption to be satisfied in some circumstances.  The minimum salary for highly compensated exempt employees will increase from $100,000 per year to $134,000 per year.  Instead of the proposed automatic annual adjustment, the DoL settled on an every three year adjustment to the salary figures in the rule.  The triennial automatic adjustments will be measured against the 40th percentile of full-time salaried workers in the Census region with the lowest wage.

Finally, and thankfully, none of the duties tests for the exemptions seem to have changed.  I will continue to pore through the final rule and will be reporting additional information as needed.  If you haven’t begun to take measures to incorporate these new regulations into your organization, don’t wait further.  If you have questions or need help, please let me know.