On May 18, the DOL released the final overtime rule, which will change federal exemptions to overtime pay under the Fair Labor Standards Act (FLSA) for administrative, executive and professional employees, the so-called "white collar" worker classifications that have long been exempt from time-and-one-half pay for working more than 40 hours per week. The DOL's final rule will affect both public and private work by all employers that are covered under the FLSA. Specifically, the rule doubles the current minimum standard salary level for exemption from $23,660 to $47,476 annually. It also increases the highly compensated employees (HCE) to an annual compensation of $134,000. DOL made no changes to the standard duties test.
The final rule takes effect Dec. 1, 2016. Beginning Jan. 1, 2020, the final rule will automatically update the standard salary level and compensation level of the HCE every three years.
On Sept. 20, ABC and a coalition of business groups filed suit against the DOL's costly and burdensome final overtime rule in the U.S. District Court for the Eastern District of Texas. ABC will continue to update members on any developments regarding the legal challenge through Newsline.
For a detailed look at the final rule, watch ABC's archived webinar "Learn about the DOL's Final Overtime Rule." A login is required.
A number of compliance materials, including a fact sheet and a FAQ on the final rule, which are located on the DOL's website.