DOL Issues Final Overtime Rule
Expanding Coverage to Millions
The Department of Labor (the "DOL") has issued its long awaited Final Rule increasing the salary threshold for white collar exemptions to the overtime provisions of the Fair Labor Standards Act ("FLSA"). 
The Rule goes into effect December 1, 2016 and is expected to expand overtime eligibility to more than 4 million workers who are currently exempt from the FLSA's overtime requirements.
  • The salary threshold has been increased from $455 per week to $913 per week ($47,476 annually).
  • The new salary threshold will apply to the FLSA's white collar exemptions, i.e., the executive, administrative, and professional exemptions.
  • Non-discretionary bonuses and incentive payments (including commissions) may account for up to 10% of the new salary threshold.
  • The salary threshold for the FLSA's "highly compensated employee" exemption will be raised to the annual equivalent of the 90th percentile of full-time salaried workers nationally ($134,004 annually).
  • The new salary threshold will automatically increase every three years, beginning on January 1, 2020.
Links to Important Documents

To assist in understanding these far-reaching changes, the DOL issued technical guidance for private employers, nonprofits and institutions of higher education. These documents are available at the following links:

What Should Employers Do to Prepare?
  • Review all positions currently classified as exempt to evaluate eligibility for overtime under the new salary threshold.
  • Identify those positions requiring reclassification under the Final Rule.
  • Review processes for recording hours to ensure time is tracked for overtime eligible employees.
  • Update payroll systems to comply with required changes.
  • Educate employees about how these changes will impact their FLSA classification and paychecks.
In light of fast-moving changes by the DOL and other government agencies, NFC encourages all businesses to undertake a thorough audit of their HR processes, policies and documents. NFC offers comprehensive audit services that include an assessment of organizational policies and practices and recommendations to ensure your business is complying with all employment laws and regulations.
 
If you have any questions about how the new overtime rules impact your business, or if you would like to discuss a more comprehensive audit, please contact  Katherin Nukk-Freeman  or the Nukk-Freeman & Cerra, PC attorney with whom you normally work.

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