The Final Rule – The New Overtime Regulations
August 18, 2016
By Brian Collins, CPA
In May 2016, the U.S. Department of Labor published its long-awaited Final Rule revising the standards needed to meet the new white collar exemptions. The Final Rule is the DOL's first major revision to white collar exemptions since 2004 and will result in millions of workers gaining eligibility for overtime. With this rule going into effect in December 2016, the DOL will virtually double the minimum monetary threshold needed for employees to qualify for exemption from overtime under the white collar exemptions. This is a substantial change from the standards in place for the last decade and will force employers to make hard decisions on how to handle the numerous employees who will now become overtime-eligible.
- The Final Rule on the new overtime regulations focuses primarily on updating the salary and compensation levels needed for executive, administrative, and professional workers to be exempt. The key points of the Final Rule are the following:Sets the standard salary level at $913 per week; $47,476 annually for a full-year worker;
- Sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test from $100,000 to $134,004; and
- Has an effective date of December 1, 2016.