On May 18, 2016, the U.S. Department of Labor (DOL), Wage and Hour Division, released a final rule to revise the overtime pay provisions under the Fair Labor Standards Act (FLSA). The Final Rule, “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees” updates the regulations governing which executive, administrative, and professional employees (commonly referred to as the “white collar” exemption) are entitled to overtime pay under the FLSA.
FMI will be hosting a webinar on the overtime rule on Wednesday, June 1 at 2:00 p.m. EDT. Tammy McCutchen with Littler Mendelson, P.C., will provide FMI members with an overview of the overtime rule requirements. She is a former administrator of the wage and hour division at the Department of Labor and is well-versed on the regulatory impact on the industry. For questions, contact FMI’s chief regulatory officer Stephanie Barnes, email@example.com.
Key Provisions of the Final Rule
The Final Rule focuses primarily on updating the salary and compensation levels needed for white collar workers to be exempt. Specifically, the Department:
1. Set the standard salary level at $47,476 annually for a full-year worker ($913 per week), which is 40th percentile of full-time salaried workers in the lowest-wage Census region (currently the South);
2. Allows up to 10% of standard salary level to come from non-discretionary bonuses, incentive payments, and commissions, paid at least quarterly;
3. No changes to the standard duties test;
4. Automatically adjusts every three years, maintaining the standard salary level at the 40th percentile of full-time salaried workers in the lowest-wage Census region.
5. Effective Date: December 1, 2016