The Department of Labor released its final overtime regulations on May 18, 2016. A link to the final rule as published in the Federal Register is available here. The new overtime rule will go into effect on Dec. 1, 2016.
Major highlights of the rule include:
- Doubles the current salary threshold level – Guarantees overtime pay to any salaried employee earning under $47,476 per year ($913 per week) who work more than 40 hours in a week.
- Automatic Salary Threshold Increases Every 3 Years (Not Annually) – Automatically updates the salary threshold every three years, maintaining the level at the 40th percentile of full-time salaried workers in the lowest-wage Census region.
- Duties Test is Unchanged – Makes no change to the standard duties test used to determine whether a salaried employee above the threshold is considered an executive, administrative or professional employee and thus exempt from overtime pay.
Given the breadth of this rule, the broad array of employers affected and its impact on the overall economy, it is widely expected that opposition will continue against this damaging regulation. Through the annual congressional federal appropriations process currently underway, there will be immediate legislative efforts to defund, block or nullify the final rule, as well as possible litigation against the Department of Labor over its process for issuing the final rule.
Analysis/Compliance guide materials: NATSO’s analysis of the final rule and compliance guide is available here.
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