Burr Alert: Changes to Federal Overtime Exemption Rules Coming in July 2016: What Your Workplace Must Know and Do to Prepare
The U.S. Department of Labor ("DOL") recently announced its long awaited changes to the federal overtime regulations will be published in July 2016. The revised regulations, which were first discussed in March 2014, are expected to make dramatic changes to common white collar exemptions from federal overtime requirements, including those applicable to executive, administrative, and professional employees. Millions of employees who are not currently eligible for overtime under the current regulations will become eligible under the DOL's proposed rule changes. Specifically, the DOL proposes to change the overtime exemptions by:
- Increasing the minimum salary level required for exemption for salaried workers to $970 per week or $50,440 annually (an increase of $455 per week and $23,660 annually);
- Increasing the total annual compensation for highly compensated employees from $100,000 to $122,148; and
- Establishing a system to automatically update minimum salary and compensation thresholds moving forward consistent with inflation and other economic factors.
In addition to the above changes, in its proposed rule the DOL requested comments regarding potential changes to the "duties" tests applicable to the exemptions. The DOL, which last updated the federal overtime regulations in 2004, received nearly 300,000 comments on the proposed changes during the 60-day comment period from July-September 2015.
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