Blog - DOL Issues New Overtime Payment Rules

DOL Issues New Overtime Payment Rules

On May 18, 2016, the Department of Labor (DOL) issued important new rules regarding overtime pay for exempt, salaried employees.

These new rules, which become effective December 1, 2016, require that employers begin tracking all hours worked by exempt, salaried employees (with no overtime pay) who earn less than $913 per week, or the equivalent of $47,476 annually.

Additionally, under the new rule, overtime must be paid to these employees should they work more than 40 hours a week.

Employers with exempt, salaried employees who earn less than the new threshold amount listed above will need to take one of the following steps to comply with the new regulations:

  • Raise the employee’s salary above the new threshold in order to retain the exempt status
  • Pay overtime in addition to the employee’s current salary when necessary.
  • Limit the worker’s hours to 40 per week, thus eliminating overtime hours.
  • Some combination of the above.

While the new rules do affect many salaried employees, not all salaried employees are exempt, even if they do earn in excess of the new minimum.

Please see the link below to Fact Sheet #17A on the Department of Labor website for a review of the who qualifies as an exempt employee.

(Important Note regarding Fact Sheet #17A: This document was last revised in July 2008. In the document it states the salary basis to be “not less than $455 per week.” This salary basis number has been revised (from $455 to $913) as noted above; however, the guidelines for exemption from minimum wage and overtime pay for executive, administrative, professional, and outside sales employees outlined in the document continue to be applicable.)

Related Links:

Fact Sheet #17A on DOL Website (PDF document, Revised 2008. See note above.)

US DOL Q&A About New Overtime Rule An extensive Question and Answer page regarding the Overtime Final Rule.

US DOL Wage and Hour Division Overtime Final Rule (Several links to additional information can be found at the end of this DOL web page.)