Publications

U.S. Department of Labor Unveils New Overtime Regulation

May 18, 2016 E-Alerts

Today, the United States Department of Labor’s Wage and Hour Division finalized its much anticipated revisions to the rules governing overtime compensation. The revisions in part, increase the income level of those who are exempt from overtime pay to $47,476.00. This almost doubles the prior threshold of $23,660.00 and allows a greater number of employees to qualify for overtime pay to as many as an additional 4.2 million employees.

These new regulations, which employers have until December 1, 2016 to comply with, include the following:

• The salary threshold will be increased to $47,476.00 annually ($913.00/week)—an increase of slightly more than 100% from the current threshold of $23,660.00 annually ($455.00/week). It should be noted that the proposed level was $50,440.00 annually ($970.00/week).

• There will be no changes to the duties test. The Department of Labor had indicated it was considering adding a quantification component similar to California’s that would have required employers to show an employee was performing exempt duties a certain percentage of time to qualify under the specific exemption.

• The salary threshold will be updated every three (3) years and tied to the 40th percentile of full-time salaried workers in the lowest wage region of the country (currently the Southeast). The proposal had the automatic updates occurring annually but was unclear on the methodology for the updates.

• Employers will have until December 1, 2016 to come into compliance with the new requirement—a period of about 200 days. The proposal did not include an implementation period but there were suggestions it could be as short as 60 days.

• No indication about how commissions/bonuses/incentive based pay will be treated. The Department of Labor sought comments on whether to give a 10% credit for these types of compensation.

In this same context, employers have experienced invigorated pay investigations during compliance reviews, and have already started seeing compliance officers inquire about compliance with Federal Minimum Wage standards. Consistent with its pay enforcement agenda, it is expected that there will be a number of inquiries about compliance with these new overtime standards once they go into effect.

While the United States Chambers of Commerce and other organizations are disappointed with this final proposal, there is no doubt that this rule will present significant challenges for both employers and employees in the private, public, and non-profit sectors, and add to the regulatory burden placed upon businesses.

Firm Highlights

Publication

The COVID-19 Vaccine Part 1

Publication

The Importance of Strategic Transitions

Transitions versus change, what’s the destination and why is this important for a business?  Kevin talks with Gwen Gierke from Gierke Jungbauer on how they help to manage transitions. Transition happens in three stages: the ending, the neutral zone, and...

Experience

Thompson Coe Saves Client $100Ks in Damages After 3-Day Trial

Experience

COVID-19 Response Team - Resources and Updates

Publication

The Tale of OCS and the Coronavirus

How has Opportunity Community Services survived during this pandemic and Phase 1? Rose Kukwa of Opportunity Community Services and Dennis Van Norman with Van Norman & Associates share their experience.  Rose and her team...

News Item

Thompson Coe Welcomes Partners Kenya Bodden and Patrick Kelly

Publication

ICHRAs

Individual Coverage HRA. What is it? What are the benefits and drawbacks? What companies are a good fit for ICHRAs versus group health plans? Kevin talks with Matt Hollister, President and CEO of Business...

Publication

U.S. Supreme Court Settles Issue of Title VII Protections for LGBTQ+ Employees

Headshot of Stephanie Rojo
Publication

Supreme Court Reaffirms and Clarifies Ministerial Exception to Employment Discrimination Laws Under First Amendment’s Religion Clause

Publication

The 2020 HR Recap

We’ve made it to the recap episode! The good, the bad, the ugly, and everything in between. Join Kevin and Elaine (Lainey) Luthens as they discuss it all including FFCRA legislation, OSHA, what they...