The Overtime Ruling Is Finally Here!

The final ruling on increases to salary thresholds for overtime exemption has been released and will take effect December 1, 2016.

Current salary exempt employees may be eligible for overtime beginning December 1.  While the duties test does not change, the existing salary threshold of $455 per week or $23,660 annually increases to $913 per week or $47,476 annually. 

You may ask, what are your options as an employer? Here are some options:

  • Increase an employee’s weekly wage to $913 or more
  • Decrease the number of hours worked by employees paid less than $913 per week to a standard 40 hours per week, or pay overtime on those hours over 40
  • Increase the employee’s weekly wage to $821.70 per week (90% of $913) and make up the remaining 10% each quarter with non-discretionary bonuses and incentive payments including commissions

In addition, the new ruling increases the annual compensation requirement needed to exempt highly compensated employees from $100,000 per year to $134,004.

These thresholds will increase every 3 years beginning January 1, 2020 and will be released in August of those years.

Additional regulations apply to state and local governments, the non-profit sector, and higher education

For more information on the final ruling, visit the Department of Labor website.

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