DOL Issues Final Overtime Rule

Monday, May 23, 2016

On May 18, 2016 the U.S. Department of Labor issued their "final" overtime rule, which is expected to affect 4 million workers. The rule will be effective December 1, 2016. It significantly increases the minimum salary for employees to qualify as exempt from overtime pay requirements. When it goes into effect, no employee who has a guaranteed salary of less than $47,476 will qualify as exempt under executive, administrative or professional exemptions. That is more than double the current minimum salary level of $23,660. The rule will not affect hourly or other non-exempt workers, who already are eligible for overtime pay.

The rule will automatically update the salary threshold every 3 years. To determine who remains exempt from overtime eligibility, the employees must: a) make over $47,476/year; b) be salaried; and c) perform exempt duties (executive, administrative or professional.)

Opponents to the rule - non profits, colleges, universities, retail and restaurant businesses, among others - are exploring potential legislative solutions to prevent the rule from becoming effective, but that could be a long shot.

Nancy Stephens, CAE, DPL 5/23/2016

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