Federal Overtime Regulations Unveiled

The US Department of Labor (DOL) issued its final overtime rule this week, making a change to the minimum salary paid to qualify an employee as exempt from overtime requirements set by the federal Fair Labor Standards Act (FLSA).

The DOL made the change from $23,660 annually, or $455 per week to $47,476 annually, or $913 per week. The rule includes no carve-outs and takes effect December 1, 2016. The salary threshold is tied to the 40^th percentile for full-time salaried workers in the lowest income census region and updated every three years. In addition, the salary level for employees who qualify for the highly compensated employee exemption rises from $100,000 per year to $134,004 per year beginning in December 2016, the rate equating to the 90^th percentile of full-time salaried workers nationally.

The DOL estimates that over 100,000 employees will become eligible for overtime when the rule takes effect. Some job providers can manage their compliance costs by absorbing the cost of the increase by either paying more employees overtime or increasing their salaries to over $47,476. Employers can also consider converting employees from exempt status to hourly therefore eliminating overtime hours or adjusting other fringe benefit packages.

The Michigan Chamber of Commerce recommends employers seek legal help if looking to manage their costs.

posted by PAA Online , Friday, May 20, 2016 11:20 AM
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