FLSA Overtime Rules Changing

The U.S. Department of Labor is proposing to modify certain provisions of the Fair Labor Standards Act. These regulations would increase the minimum salary required (currently $455 per week/$23,660 annually to $921 per week/$47,892 annually) for overtime exemption particularly for executive, administrative and professional employees (often referred to as “white collar”). It is also proposed that this salary level will automatically rise annually.

Highly Compensated Employees: Currently “highly compensated employees” earning at least $100,000 in compensation annually would be exempt from overtime if the employee customarily and regularly spent time on one or more exempt duties and the employee did not engage in manual work. Proposed regulations released by the DOL mid 2015, would increase the required salary for “highly compensated employees” to $122,145. Final rules have not been issued, but could be as early as July 2016.

As an employer, what should I be doing now? For starters, review your current employees and their job descriptions to ensure they are properly categorized as hourly or salaried. To be accurately considered salary, an employees job must pass the salary and duties tests. For more information, please navigate to http://www.dol.gov/whd/overtime_pay.htm. Secondly, review the compensation of your current salaried employees. Even if some may currently fall under the $47,892 per year, their hours the next year may throw them over the threshold.