Employees Who Make Under $47,476 and the New Overtime Rule

What you need to know

On May 18th, the US Department of Labor released its final rule regarding the changes to the overtime threshold for the Fair Labor Standards Act with the new regulation taking effect Dec. 1, 2016.  Among other things, the Labor Department doubled the minimum salary needed to qualify for these exemptions, from the previous level of $455 a week (or $23,660 a year) to $913 a week (or $47,476 a year), with increases every three years after that.

Who will be affected by the changes

The changes will make an estimated 4.2 million workers eligible for overtime pay effective December 1, 2016. Section 13(a)(1) of the FLSA provides an exemption from both minimum wage and overtime pay for employees employed as executive, administrative, professional and outside sales employees.  Section 13(a)(1) and Section 13(a) (17) also exempt certain computer-related professions.  To qualify for the exemption employees generally, must meet certain tests regarding their job duties and be paid on a salary basis at not less than $913 per week.  Job titles do not determine exempt status.  For an exemption to apply, an employee’s specific job duties and salary must meet all the requirements of the Department’s regulations.

Overtime & Minimum Wage Exemptions

To qualify for certain exemptions from the FLSA minimum wage and overtime requirements under the new rules (and as of December 1), employees must:

1. Be salaried, meaning that they are paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed (the “salary basis test”);
2. Be paid more than a specified weekly salary level, which is $913 per week (the equivalent of $47,476 annually for a full-year worker) under this Final Rule (the “salary level test”); and
3. Primarily perform executive, administrative, or professional duties, as defined in the Department’s regulations (the “duties test”).

How can SwipeClock help keep my business compliant with “The Final Rule.”

SwipeClock provides a comprehensive suite of integrated Workforce Management solutions that make it easy to manage your workforce while at the same time ensuring your business is in compliance with the Department of Labor’s final overtime rule.

References:

Wage and Hour Division (WHD). (n.d.). Retrieved July 20, 2016, from https://www.dol.gov/whd/overtime/final2016/ Article Title: Wage and Hour Division (WHD)