Firm Management
Labor Dept Publishes New Overtime and Exempt Status Rules
The U.S. Department of Labor has finalized sweeping changes to the Fair Labor Standards Act (FLSA) overtime rules, extending protections to millions U.S. workers.
May. 18, 2016
The U.S. Department of Labor has finalized sweeping changes to the Fair Labor Standards Act (FLSA) overtime rules, extending protections to millions U.S. workers.
The rule has the potential to impact the exempt status of a wide variety of positions in virtually every industry. The rule, proposed by the DOL last year, focuses primarily on updating the salary and compensation levels needed for workers to be exempt.
The changes double the salary threshold for “white collar” exemptions from the current minimum of $455 per week, or $23,660 a year, to $913 per week, or $47,476 annually. Under the new rules, the salary threshold will automatically update every three years, based on wage growth over time. The final rules will become effective on December 1, 2016.
The rule sets the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South tegion. Under the previous regulations, a white collar employee had to be paid at least approximately $23,660 annually to qualify as an exempt employee.
More on the new overtime rules: