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.