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Urgent Alert About New Federal Overtime Rules

As outsourced general counsel to most of our clients, we have to often deal with internal employment matters for our client companies.  Over the past years, overtime-pay related matters have been attracting more and more attention in a range of industries.  Yesterday, on May 18, 2016 the revised Overtime Rules were released by the federal Department of Labor.  The rules raise the minimum salary threshold for employees classified as “exempt” from the overtime pay requirements.  The new rules go into effect on December 1, 2016 and provide, among other requirements, that:

  1. In order to be considered exempt and ineligible for overtime wages under the “white collar” executive and administrative exemptions, most employees will need to be compensated on a salary basis of at least $913.00 per week (or $47,476.00 per year), in addition to the requirement that they perform certain delineated “exempt” duties and responsibilities. It is expected that this amount will be updated on January 1, 2020, and every three years thereafter.  Non-discretionary bonuses, incentives and commissions that are paid quarterly or more frequently can count towards up to ten percent of this salary amount.
  2. For employees to be classified as exempt under the “highly compensated exemption,” employees must actually receive a total annual compensation of at least $134,000.00 per year, and perform at least one exempt duty. If that amount is not actually received, for example because commission earnings were less than expected, an employer may bring the annual compensation to the required minimum within one month after the end of the year.

All employers irrespective of industries should be prepared to comply by December, potentially by raising salaries or by reclassifying employees as eligible for overtime pay (or non-exempt).

If you have any questions or concerns, please contact us.  Our experienced team of attorneys will help you navigate the regulations to ensure that your employees are being properly classified and that your companies are in full compliance with the new Federal requirements.

George A. GellisUrgent Alert About New Federal Overtime Rules
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