It’s Here … The DOL’s New Overtime Rule is (Finally) Published

The days of speculation regarding the changes to the salary requirements for the FLSA overtime exemption have (finally) come to an end.

The US Department of Labor has released its new overtime regulations, resulting in the following changes:

  • The minimum salary threshold for the FLSA overtime exemption is increasing from $23,660 per year to $47,476 per year (or $913 per week);
  • Employers will be permitted to use an employee’s nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10% of the new standard salary level — subject to the following guidelines:
    • nondiscretionary bonuses and incentive payments must be paid on a quarterly or more frequent basis and
    • the employer may make a “catch-up” payment on the first payday following the close of the quarter, if the nondiscretionary bonus/incentive payment falls short of the salary level;
  • The total annual compensation requirement for highly compensated employees is increasing to $134,004 annually; and
  • The salary threshold will be updated once every three years

The new rule goes into effect December 1, 2016.  It is strongly recommended that employers start thinking about how this change impacts their current exempt workforce as soon as possible.

The new rule is over 500 pages long, so to help employers digest these regulations, the Department of Labor has released the following guidance materials:

In addition, the White House has released the following guidance: