This week, the U.S. Department of Labor issued revised administrative regulations regarding eligibility of workers to receive overtime. This covers all employers subject to the Fair Labor Standards Act or who are working on federal contracts. The revised regulations will:
* Raise the salary threshold indicating eligibility from $455/week to $913 ($47,476 per year).
* Automatically update the salary threshold every three years, based on wage growth over time, increasing predictability.
* Strengthen overtime protections for salaried workers already entitled to overtime.
* Provide clarity for workers and employers.
The final rule will become effective on December 1, 2016, giving employers more than six months to prepare. The final rule does not make any changes to the duties test for executive, administrative and professional employees (i.e. “expect employees”) and not all business are “employers” under the Wage and Hour laws.
Employers will have the following decisions:
* Pay all eligible employees who are below the new threshold “time and a half” for overtime
* Limit worker’s hours to 40 hours per week
* Hire more employees to share the time
* Increase workers’ pay to a pay greater than the threshold
Some business organizations may challenge this regulation in court, but overtime laws are complex and when combined with increases by state and local “living wage” laws, the impact can be significant. You may want to review your policies with us to ensure you are ready to comply with these requirements.
* Raise the salary threshold indicating eligibility from $455/week to $913 ($47,476 per year).
* Automatically update the salary threshold every three years, based on wage growth over time, increasing predictability.
* Strengthen overtime protections for salaried workers already entitled to overtime.
* Provide clarity for workers and employers.
The final rule will become effective on December 1, 2016, giving employers more than six months to prepare. The final rule does not make any changes to the duties test for executive, administrative and professional employees (i.e. “expect employees”) and not all business are “employers” under the Wage and Hour laws.
Employers will have the following decisions:
* Pay all eligible employees who are below the new threshold “time and a half” for overtime
* Limit worker’s hours to 40 hours per week
* Hire more employees to share the time
* Increase workers’ pay to a pay greater than the threshold
Some business organizations may challenge this regulation in court, but overtime laws are complex and when combined with increases by state and local “living wage” laws, the impact can be significant. You may want to review your policies with us to ensure you are ready to comply with these requirements.
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