In 2014, President Obama directed the Secretary of Labor to update the overtime regulations to reflect the original intent of the Fair Labor Standards Act, and to simplify and modernize the rules so they’re easier for workers and businesses to understand and apply. The department has issued a final rule that will put more money in the pockets of middle class workers – or give them more free time.
(Note: this is not a law that will be discussed and/or voted upon. It is a mandatory ruling that has already taken place and ALL employers must comply on or before December 1, 2016).
The final rule is:
- Raise the salary threshold indicating eligibility from $455/week to $913 ($47,476 per year), ensuring protections to 4.2 million workers.
- Automatically update the salary threshold every three years, based on wage growth over time, increasing predictability.
- Strengthen overtime protections for salaried workers already entitled to overtime.
- Provide greater clarity for workers and employers.
The final rule will become effective on December 1, 2016, giving employers more than six months to prepare. The final rule does not make any changes to the duties test for executive, administrative and professional employees.
In response to the new overtime rule, employers can:
- Pay time-and-a-half for overtime work.
- Raise workers’ salaries above the new threshold.
- Limit workers’ hours to 40 hours per week.
- Some combination of the above.
This ruling does NOT make exceptions for non-profit organizations (churches, schools, charities, etc.) All salaried employees currently earning below $47,476. per year must either raise the salary and keep the employee exempt, pay overtime in addition to the employee’s current salary, or evaluate and realign hours and staff workload.
Click here to read further about the final rule for Non-Profits:
We will be glad to set up a workshop at the Chamber to help you understand how this ruling will effect your business. Please email email@example.com if you are interested and would like to attend. Thanks, Jo