On May 18, the Department of Labor released its final regulations governing overtime exemptions under the Fair Labor Standards Act.
The Final Rule focuses primarily on updating the salary and compensation levels needed for Executive, Administrative and Professional workers to be exempt. Specifically, the final rule:
- Sets the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South ($913 per week; $47,476 annually for a full-year worker);
- Sets the total annual compensation requirement for highly compensated employees subject to a minimal duties test to the annual equivalent of the 90th percentile of full-time salaried workers nationally ($134,004); and
- Establishes a mechanism for automatically updating the salary and compensation levels every three years to maintain the levels at the above percentiles and to ensure that they continue to provide useful and effective tests for exemption.
The effective date for the final rule is December 1, 2016.
There are many different perspectives to how this rule may impact the Employment Practices Liability arena germane to many PLUS Members. To help sort it out, we have asked that member law forms provide information that we can share with our members regarding the final rule. Below are the resources we’ve gathered (if you’d like to submit information for this page, please email firstname.lastname@example.org):
From the PLUS webinar on this issue, Noel Tripp of Jackson Lewis reviews four strategies for employers to deal with the changes:
Lindsey S. Mignano, a partner with Smith Shapourian Mignano LLP, discusses the rule and exemptions.
David Walston, a partner with Christian & Small, explains the new rule in his article U.S. Department of Labor Releases New Overtime Regulations – Key Provisions Explained.
In his article Will New DOL Overtime Rules Result in a Spike in Collective Actions? Robert Chadwick, a Managing Member with the firm Stamer Chadwick Soefje, PLLC, discusses how the financial stakes in a collective action under the Fair Labor Standards Act (FLSA) may skyrocket when the new overtime rules take effect.
The United States Department of Labor has created a series of webinars which will provide general information on the rule as well as provide information for both the non-profit sector and state and local governments.
Below is a list of PLUS corporate member law firms who have authored articles on this topic:
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