U.S. Department of Labor releases long-awaited overtime rule
On May 17, the U.S. Department of Labor released its long-awaited overtime rule addressing overtime pay. NALP has been involved in the Partnership to Protect Workplace Opportunity (PPWO) Coalition, which has been focused on educating Members of Congress about business concerns regarding the proposed overtime changes. The PPWO is continuing to ask its members to tell Congress that S. 2707 and H.R. 4773, the Protecting Workplace Advancement and Opportunity Act, will provide relief from this rule.
A few high-level bullet points:
The new salary level required for the executive, administrative, and professional exemptions will be $913 per week, which comes to $47,476 per year.
Up to 10% of the salary level can be met with bonuses and commissions. For employers to credit nondiscretionary bonuses and incentive payments toward a portion of the standard salary level test, however, such payments must be paid on a quarterly or more frequent basis and the employer is “permitted” to make a “catch-up” payment. More specific details of this new development are still unclear.
The new levels will be effective on December 1, 2016. December 1 is a Thursday, which means that salary increases to ensure continued use of the exemption for weekly/biweekly employees must be made for the workweek (or pay period) that includes December 1.
The salary level will be increased automatically every three years, starting in 2020. The amount will be based on the 40th percentile of full-time salaried workers in the region in which the salary level is lowest (historically, the South). The Department will publish the information in the Federal Register in advance of the increase. It is anticipated that the salary will be $51,000 per year on January 1, 2020.
The final overtime rule (508 pages) is now available at the public inspection desk here.