Breaking News Regarding Required Overtime Pay for Certain Employees

The Department of Labor has just announced a Final Rule on overtime pay, which will now require 4.2 million more workers to now be be paid for overtime work. This Final Rule defines which white collar workers are protected by the Fair Labor Standards Act’s minimum wage and overtime laws. Employers must comply with these new regulations by December 1, 2016.

Here are some key provisions of the Final Rule:
  • All workers less than $913 per week, or $47,476 annually for a full-year worker, must be paid at the overtime rate for any time worked beyond 40 hours per week.
  • Overtime pay rate is time and one-half the regular hourly rate.
  • The threshold for highly compensated employees has gone up, from $100,000 to $134,004.
  • Automatic updates to these thresholds will be made every three years, beginning January 1, 2020.
These new regulations aim to strengthen the middle class, which is first done by securing better salaries and overtime protections.  Companies must act now to begin to plan for the increase in wages.
Employers generally have three choices for affected employees:
  • Limit workers’ hours to 40 per week
  • Pay time and one-half their regular hourly rate for all hours worked over that limit
  • Increase exempt employees’ salaries above the $47,476 threshold
For more information, see the Department of Labor’s Overview and Summary of Final Rule.