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Employers: New Overtime Rules

June 23rd, 2016

The US Department of Labor released its much-anticipated final rule that raises the white collar overtime exemption threshold under the Fair Labor Standards Act (FLSA). The new regulations take effect on December 1, 2016.

The revised overtime pay regulation will increase the salary threshold for the overtime exemption from $455 a week ($23,600 annually) to $913 a week ($47,476 annually).

Businesses have two options. One is to start tracking hours for exempt salaried employees who are at, or below the $47,476 threshold, and pay overtime rates for time worked over 40 hours per week. Another option, for employees that are near the new $47,476 threshold, and they frequently work overtime, it may make sense to raise their salary to more than $47,476, and thus avoid the overtime pay requirement.

 

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