DOL putting new overtime rule in place

By |  May 19, 2016

US9DOL_SealThe U.S. Department of Labor (DOL), in conjunction with President Barack Obama and Secretary Thomas Perez, released a final rule updating overtime regulations.

According to DOL, the new rule will automatically extend overtime pay protections to more than 4 million workers within the first year of implementation. In addition, it will focus primarily on updating the salary and compensation levels needed for executive, administrative and professional workers to be exempt.

In 2014, President Obama signed a presidential memorandum directing DOL to update the regulations defining which white collar workers are protected by the Fair Labor Standards Act’s (FLSA) minimum wage and overtime standards. The FLSA establishes minimum wage, overtime pay, recordkeeping and youth employment standards affecting employees in the private sector and in federal, state and local governments.

Following this, DOL published a Notice of Proposed Rulemaking in the Federal Register on July 6, 2015, and invited interested parties to submit written comments on the proposed rule. DOL received more than 270,000 comments, which helped shape the final rule.

According to DOL, the final rule:

  1. 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 ($913 per week; $47,476 annually for a full-year worker);
  2. Sets the total annual compensation requirement for highly compensated employees subject to a minimal duties test to the annual equivalent of the 90th percentile of full-time salaried workers nationally ($134,004); and
  3. Establishes a mechanism for automatically updating the salary and compensation levels every three years to maintain the levels at the above percentiles and to ensure that they continue to provide useful and effective tests for exemption.

The final rule also amends the salary basis test to allow employees to use non-discretionary bonuses and incentive payments, including commissions, to satisfy up to 10 percent of the new standard salary level.

According to DOL, the effective date of the final rule is Dec. 1.

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About the Author:

Allison Kral is the former senior digital media manager for North Coast Media (NCM). She completed her undergraduate degree at Ohio University where she received a Bachelor of Science in magazine journalism from the E.W. Scripps School of Journalism. She works across a number of digital platforms, which include creating e-newsletters, writing articles and posting across social media sites. She also creates content for NCM's Portable Plants magazine, GPS World magazine and Geospatial Solutions. Her understanding of the ever-changing digital media world allows her to quickly grasp what a target audience desires and create content that is appealing and relevant for any client across any platform.

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