Employers will face higher costs of doing business under Department Of Labor Rule starting December 1, 2016.
The Department of Labor unveiled the final ruling of the new federal overtime regulations last Tuesday. This ruling will extend overtime eligibility to more than four million additional workers within its first year of implementation. The new rule, which will be effective December 1, more than doubles the minimum salary level under which employees qualify as exempt from overtime pay requirements.
Currently, the minimum salary level is $23,660. Under the new rule, anyone earning less than $47,476 per year will be eligible for overtime compensation for hours worked over 40. “This policy will be an extreme hardship for small businesses,” said Jo Mixon, President and CEO of Angel Fire Chamber of Commerce. “Small business owners will be forced to make very tough decisions. Exempt employee’s salaries, by mandate, must be raised to at least $47,476 per year or be forced to go hourly with overtime. Business owners will have to decide who they can afford to keep in exempt positions, who to reclassify as hourly wage earners, and who to let go.” The Chamber took a position in opposition of this ruling in March.
The final rule includes a mechanism for automatically updating the salary threshold every three years. The next automatic update to the salary threshold would be on Jan. 1, 2020, and the new salary level will be announced 150 days before it takes effect. The minimum salary level is set based on the 40th percentile of wages of full-time salaried employees in the lowest wage Census region (currently, the South).
For any small business owner interested, the US Chamber is hosting a free webinar tomorrow, Tuesday, May 24 at 10:00 am to 11:00 am MST.
Webinar on DOL’s NewOvertime Rule
Please join us from 12:00 pm to 1:00 pm EDT on Tuesday, May 24 for a webinar on the Department of Labor’s final overtime regulation released on May 18, 2016. Tammy McCutchen of Littler Mendelson P.C., former Wage and Hour Administrator in the Bush administration and outside counsel for the U.S. Chamber on this rulemaking who helped develop the Chamber’s comments on the proposed rule, will provide guidance on how to comply with the new regulation. Randy Johnson and Marc Freedman will also participate. Participants will be able to ask questions.
Please register for the webinar.
Participant Access Instructions
Dial in 5-10 minutes prior to the start time using the phone number and passcode below:
Phone: 888-523-1228
Passcode: 2971499
If you have any questions, please contact David Alim at dalim@uschamber.com.
Speak Your Mind