Employer and employee alert
On May 18, 2016 President Obama and Labor Secretary Perez announced new Department of Labor overtime regulations that go into place December 1, 2016. The Federal Labor Standards Act (FLSA) has information everyone needs to know to comply with these new rules.
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Any worker making $47,476 or less must be paid overtime for hours worked in excess of 40 in a given week. This is true whether the employee receives a salary or hourly pay. The overtime rate must be at least time and one-half. |
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Up to 10% of the compensation amount can be in the form of nondiscretionary bonuses or incentives. |
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Highly compensated employees (HCE) is now defined as $134,004 or higher. The old rate was $100,000. Those above these income levels are exempt from the overtime rules as long as a minimal duties test is met. |
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The new rule is effective December 1, 2016 |
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The wage amount will automatically reset every three years. The next change will be January 1, 2020. |
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Actual implementation documentation has not been published in the Federal Register. Final regulations could still change slightly. |
What this means to you
No matter what the pundits say, the true impact of this change is unknown. The only certainty is that all employers now face additional administrative duties and potential legal action for non-compliance. This includes businesses, schools, and non-profit organizations. What is important at this point is to be aware of the upcoming change and plan for it.