The Department of Labor (DOL) today released its Final Rule on Overtime Exemption under the Fair Labor Standards Act (FLSA), Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees. The rule is a revision of the regulations governing which executive, administrative, and professional employees (white collar workers) are entitled to the FLSA’s minimum wage and overtime pay protections. The current salary threshold for exemption is $455 per week ($23,660 per year). Today's Final Rule sets the new salary threshold at $913 per week ($47,476 per year). The effective date is December 1, 2016. The DOL estimates that this will result in approximately 4.2 million currently exempt workers, who earn at least the current weekly salary level of $455 but less than the new salary level of $913, to become eligible for overtime. As such, the rule requires employers nationwide to reclassify many of their white collar employees.
Understanding the implications of the regulations is critical for employers and legal advisors to navigate the complex reclassification decisions they now face. This guide illustrates the key factors employers should consider when responding to changes:
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