Final Rule on Federal Wage and Hour Laws to Impact Over 4 Million Employees

The Department of Labor (DOL) issued its final rule today making significant changes to federal wage and hour laws. The rule, which will go into effect on December 1, 2016, raises the minimum salary threshold for exempt employees from $23,660 per year to $47,476 per year or $913 per week. The duties tests remain unchanged.

What does this mean?

Employees who are currently being treated as exempt from overtime but are making less than $47,476 will now be considered non-exempt and entitled to overtime pay for hours worked over 40 in a workweek. The minimum threshold will be automatically adjusted every three years. For the first time, the new rule permits employers to count bonuses and commissions toward up to 10% of the salary threshold. The rule also raises the salary threshold for highly compensated employees from $100,000 per year to $134,004. The new rule is expected to impact over 4.2 million employees.

How does this affect employers?

Employers have until December 1, 2016, to effect these changes. Between now and then, it is imperative that employers review not only payroll but also job descriptions and policies that relate to working time to make sure that the practical applications of those policies comply with the new rule.

Dickie McCamey’s Employment and Labor Law attorneys can answer your questions and are ready to help you become compliant with the new rule.

Terri Imbarlina Patak