The United States Department of Labor has issued new rules governing overtime pay under the Fair Labor Standards Act (FLSA), effective December 1, 2016. The FLSA requires that covered employees be paid time-and-one-half for overtime hours in excess of 40 hours per week, unless the employee is exempt under specified criteria. The new rule increases the salary threshold for “highly compensated employees,” who need not be paid overtime, to $134,004 from its current level of $100,000. The new rule also more than doubles the salary threshold for the “white-collar exemption,” under which certain employees may be exempt if they perform executive, administrative, and professional duties, from $23,660 to $47,476. Going forward, the thresholds will be updated every three years.
Legislation that would postpone the implementation of the new rules for six months has been proposed and has passed the House of Representatives, but the administration has stated that the President will veto any delay if the issue reaches his desk.
Because the wage-and-hour laws are complex and subject to detailed regulations, and an employer’s liability for failing to pay required overtime can be serious and sometimes ruinous, employers with questions about their worktime-calculation procedures or overtime policies should discuss their situations with qualified employment counsel.