The final rule on the overtime regulations was released tonight.
All employers are impacted by this change.
You can’t ignore this.
Are you prepared?
Get “Overtime Ready”, a step-by-step guide – Available soon on my website.
Here are the key points from the Department of Labor (DOL):
1. The Salary Level Increases to $913 Per Week for White Collar Exemption. Currently, to qualify as exempt, employees must make more than $455/week or $23,660/year. The DOL has announced that the salary threshold will be increased to $913/week or $47,476/year. While the change applies to all industries, it will disproportionately impact the nonprofit, government, service-sector industries, and regions where wages are traditionally lower.
2. The Salary Level Increases to $134,004 Per Year for Highly Compensated Employees (HCE). Currently, the HCE exemption is set at $100,000.
3. The Effective Date Is December 1, 2016. Employers have five months to comply with the final rule. Considering the impact of the changes, it’s just enough time to adapt to the changes and shape your workforce.
4. For the First Time, the DOL includes an automatic updating of the salary levels every three years. DOL wants to provide predictability and more graduated salary changes for employers.
5. Bonus and Incentive Pay Can be Included to Meet The Salary Test. However, those are capped at 10% of the total salary. In other words, employees making $42,730 in wages meet the new salary test if they also earn at least $4,750 in nondiscretionary bonuses and incentive payments (including commissions).
6. No change to the duties test. The existing job duty requirements to qualify for Executive, Administrative and Professional exemptions remain the same.
Don’t be caught off guard by this significant change, contact me today to get your started on this “new world of overtime.” Let’s examine how to keep you compliant and keep you financially sound.