HR Insights – Overtime Rule Update

Today the U.S. Department of Labor announced a new final overtime rule that increases the salary employees must be paid before they qualify for a white collar exemption from overtime wages under the Fair Labor Standards Act. The DOL estimates that about 11 million employees will be affected by this final rule and receive overtime pay protections that were not previously available to them.

The final rule increases the salary level for administrative, executive and professional employees to $47,476 per year (or $913 per week) and the salary level for highly compensated employees to $134,004 per year. These salary thresholds will be automatically updated every three years, with the first automatic update expected by Jan. 1, 2020. The final rule does not change the duties test for any of these overtime wage payment exemptions.

Employers will need to comply with the final rule by Dec. 1, 2016.

For more information on the rule and communication strategies for discussing it with your employees, click on this link.

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