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US Department of Labor Announces Final Rule on Overtime Regulations

In 2015, the Department of Labor announced proposed rules which would update the overtime rules by increasing the salary requirement to qualify for an exemption from the minimum wage and overtime pay protections of the Fair Labor Standards Act. Following an extensive comment period, the Department of Labor announced publication of the Final Rule on May 18, 2016. Among other things, the Final Rule set the salary level required to qualify for the exemption at $913 per week (compared to the current $455 per week), and set the total annual compensation requirement for the highly compensated employee exemption at $134,004. These salary levels will be automatically updated every three years. The Final Rule also permits employers to count nondiscretionary bonuses, incentives, and commissions toward up to 10% of the required salary level, so long as those amounts are paid on a quarterly basis. The Final Rule did not change any of the job duty requirements to qualify for the exemption. The Final Rule takes effect December 1, 2016.

To discuss how this may impact your business, contact an employment law attorney at Woods Fuller today.

May 18, 2016