New Federal Overtime Rule in Effect

May 2016 | Business

On May 18, 2016, the United States Department of Labor finalized and published its final rule to update overtime regulations that will affect many employers across the country. The rule focuses on the overtime regulation’s applicability to those individuals in an Executive, Administrative, and Professional roles by raising the salary and compensation threshold that allows those workers to be eligible for overtime.

The rule’s major changes include:

  1. Sets the standard salary level at $913 per week or $47,476 annually for a full-year worker. This means that salaried workers who earn up to these amounts will be entitled to overtime pay, irrespective of their status as a salaried worker;
  2. Establishes a mechanism for automatically updating the salary and compensation levels every three years to maintain the levels at the above percentiles and to ensure that they continue to provide useful and effective tests for exemption; and
  3. Allows employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.

This rule goes into effect on December 1, 2016.

If you have questions about how the applicable laws affect your business, contact Greg Haffner at Curran Law Firm, P.S.—Experienced, dedicated, and responsive legal representation located in South King County.