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Overtime Rules Go into Effect December 1, 2016- Are Your Employees Classified Correctly? 
May 20, 2016

Just because your employees are paid on a salary basis does not mean they are not entitled to overtime for work over forty hours. The Department of Labor (DOL) is cracking down on inappropriately classified employees, which can cost you as the employer.

This week, the DOL published the final rules updating federal overtime regulations. Effective December 1, 2016, this ruling will automatically extend overtime pay protections to over four million workers across the U.S. Are your employees currently classified as exempt from overtime still exempt? Here are the key provisions of the rules that employers must know to make an assessment:

Employees making under $47,476 annually or $913 weekly will likely qualify for overtime pay of time and one half for work over forty hours.

Further, the new rules:

  1. Set the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test at $134,004; and
  2. Establishes a mechanism for automatically updating the salary and compensation levels every three years to maintain the levels and to ensure that they continue to provide useful and effective tests for exemption.
  3. Amends the salary basis test to allow employers to use nondiscretionary bonuses and incentive payments, including commissioner and longevity payments, to satisfy the new income levels.

 If you need help determining whether your employees are exempt or non-exempt and entitled to overtime payment, our employment and labor attorneys are at your disposal.

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