The U.S Department of Labor’s Wage and Hour Division has finalized its much anticipated revisions to the rules governing overtime compensation. The revisions, in part, increase the income level of those who are exempt from overtime pay to $47,476, almost doubling the prior threshold, allowing a greater number of employees to qualify for overtime pay.
According to the White House, the modifications are expected to extend overtime protections to an additional 4.2 million Americans and significantly increase wages for workers over the next decade. The revisions come at a time when the country, and federal contractors in particular, are seeing the Obama Administration and the federal agencies “double-down” on commitment to fair pay.
The new regulations, with which employers will have until December 1, 2016 to comply, are yet another addition to the Agency’s pay enforcementtoolbox which already includes Federal Minimum Wage, Pay Transparency regulations, Directive 307 and Item 19 pay data submission requirements for OFCCP audits. The toolbox will soon be expanded further with the new EEO-1 pay data collection tool.
Employers have experienced invigorated pay investigations during OFCCP compliance reviews, and have already started seeing compliance officers inquire about compliance with Federal Minimum Wage standards. Consistent with its pay enforcement agenda, we expect to see inquiries about compliance with these new overtime standards once they go into effect.