In April, we published a blog post titled “Changes in Overtime Laws are Coming.” Since that time, on May 18th, 2016, the Department of Labor officially announced the publication of the rule updating overtime regulations. The changes will take place December 1, 2016, giving employers plenty of time to prepare.
In this post, we simply hope to update our previous post with specific information that was not available at the time.
Overtime Rule (White Collar Exemption)
Under the new rule, non-exempt employees must receive pay for working more than 40 hours per week. The wage threshold that determines whether an employee is an exempt will increase from $23,660 annually to $47,476 annually. All employees making less than the $47,476 (or $913 per week), will be qualified to receive overtime pay of 1.5 times their base rate of pay for each hour over 40.
Highly Compensated Employee Exemption
In order to be considered a “highly compensated employee” exempt from overtime pay, total annual compensation has gone up from $100,000 to $134,004.
Wage Calculation
For purposes of calculating an employee’s wages for the wage threshold, non-discretionary bonuses, incentive pay, and commissions are included if they are paid at least quarterly and do not exceed 10% of an employee’s compensation.
The Department of Labor built in an automatic increase to the wage threshold every three years beginning January 1, 2020.
For more details about the new rule, you can visit the Department of Labor’s website here.
ABOUT THE AUTHOR – SHANNON MIDDLETON
Shannon Middleton is an attorney at Gutwein Law. Prior to receiving her J.D. from Indiana University McKinney School of Law, she earned a BS in Management from Purdue University. She focuses primarily on business and employment law.
