DOL Final Overtime Rules Released Today
UPDATE 5/18: President Obama finalizes FLSA changes on salary and compensation levels for “white collar workers.”
The new legislation aims to better define exemptions for executive, administrative, and professional personnel. For employers to be considered staff exempt, employees must meet certain minimum tests related to their primary job and be paid accordingly on a salary basis. Under the new rule, exempt employees making a salary under $47,476 ($913 a week) will automatically qualify for overtime pay when they work more than 40 hour per week.
Additionally, the new rule establishes automatic updates every three years (beginning January 1, 2020) for salary and compensation levels, and amends the salary basis test to allow employers to use nondiscretionary bonuses, incentive payments and commissions to satisfy a percentage of the new standard salary level.
Changes are scheduled to go into effect on December 1, 2016.
The office of management and budget has not yet published the rule in the Federal Register. The final rule that appears in the register may contain minor formatting differences
Keeping Pace With FLSA Reform
Compliance weighs heavily on the minds of just about every HR Director or company manager. Keeping pace with sanctioned rulings and anticipated changes are a must – no matter how difficult a task. And just recently, the government unveiled proposed changes and new legislation pertaining to the Fair Labor Standards Act (FLSA).
Established in 1938, the FLSA is the federal law that ensures that wages are paid for all hours worked, and that all overtime hours, and earned and unpaid overtime pay is received by wage earners. The Department of Labor (DOL) that oversees the FLSA, has suggested potential amendments, and implemented new changes that you need to be aware of.
The DOL has proposed to update the FLSA exemption for “white collar” employees. So, what could this mean for you? The proposed legislation aims to better define exemptions for executive, administrative, and professional personnel, outside sales, and computer employees. For employers to considered staff exempt, employees must meet certain minimum tests related to their primary job and be paid accordingly on a salary basis. The proposal calls for an increase in the minimum salary level (from $23,660 a year to $50,440 annually), and to automate this increment to prevent the ruling from becoming outdated. While it should be noted that the DOL is not proposing changes to the current standard tests, they are welcoming comments on whether the tests are working to screen out employees who are not bona fide “white collar” exempt employees. A final ruling on this issue will be announced in July 2016.
In order to keep your company compliant, it’s important to receive regular updates and notifications of changes to State and Federal regulations. At Complete Payroll Solutions (CPS), we make it our priority to keep clients informed of all amended laws, and any pending or upcoming changes that could have an impact on their HR Department. To learn more about our compliance services and support, and ways CPS is helping companies with all aspects of HR, give us a call at 866.658.8800.
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