Alert: New Rules Expand Overtime Pay Eligibility
The U.S. Department of Labor recently issued new rules raising the salary threshold required to qualify for the “white collar” exemption under the Fair Labor Standards Act to $47,476 per year or $913 per week. The new salary level is more than double the current $23,660 annual or $455 weekly cutoff to qualify for exemptions for executive, administrative, and professional employees.
Employers are now faced with the challenge, before December 1, 2016, of analyzing the status of all employees who earn less than the new salary threshold, but who were previously exempt from overtime, to determine how they will be paid going forward. Employers will have to consider whether to increase the salaries of those employees to meet the new salary threshold or to reclassify them as non-exempt and thus eligible for overtime.