U.S. DOL Issues New Overtime Regulations

Training for: Legal Notes

The U.S. Department of Labor has issued long anticipated regulations revising the overtime pay exemption rules under the federal Fair Labor Standards Act (FLSA).

The new regulations increase the minimum salary required for an employee to be exempt from overtime pay requirements from $455/week to $913/week (or $47,476/year), effective Dec. 1, 2016. This salary threshold will be updated automatically every three years. The regulations make no changes to the “duties test” for determining whether salaried workers who earn more than the minimum are exempt from overtime pay requirements.

To prepare for the new minimum salary, we recommend that employers review all positions currently assumed to be exempt. For employees who earn less than $913/week, the employer may (1) raise the employee’s salary to the new minimum and continue to treat the employee as exempt (assuming the “duties test” is also met), or (2) treat the employee as nonexempt and pay time and a half the employee’s hourly rate for all work hours exceeding 40 in a workweek, or (3) treat the employee as nonexempt and limit the employee’s hours to no more than 40 hours in a workweek.

For more information on the new overtime regulations, see the U.S. DOL webpage at https://www.dol.gov/featured/overtime/ and our “Information Packet” on the FLSA, available free to members at www.memun.org. (By S.F.P.)

The U.S. Department of Labor has issued long anticipated regulations revising the overtime pay exemption rules under the federal Fair Labor Standards Act (FLSA).

The new regulations increase the minimum salary required for an employee to be exempt from overtime pay requirements from $455/week to $913/week (or $47,476/year), effective Dec. 1, 2016. This salary threshold will be updated automatically every three years. The regulations make no changes to the “duties test” for determining whether salaried workers who earn more than the minimum are exempt from overtime pay requirements.

To prepare for the new minimum salary, we recommend that employers review all positions currently assumed to be exempt. For employees who earn less than $913/week, the employer may (1) raise the employee’s salary to the new minimum and continue to treat the employee as exempt (assuming the “duties test” is also met), or (2) treat the employee as nonexempt and pay time and a half the employee’s hourly rate for all work hours exceeding 40 in a workweek, or (3) treat the employee as nonexempt and limit the employee’s hours to no more than 40 hours in a workweek.

For more information on the new overtime regulations, see the U.S. DOL webpage at https://www.dol.gov/featured/overtime/ and our “Information Packet” on the FLSA, available free to members at www.memun.org. (By S.F.P.)