October 10, 2016
FLSA: Employees Must Earn More To Qualify For Overtime Exemption
The U.S. Department of Labor’s long-expected amended regulations to the Fair Labor Standard Act (“FLSA”) will become effective on December 1, 2016. Under these new regulations, employees across the nation must earn at least $913 per week (or $47,476 annually) in order to qualify for any of the “white collar” (executive, administrative or professional) overtime exemptions. This minimum salary will be adjusted annually to an amount equal to the 40th percentile of weekly earnings for full-time salaried workers. Although lawsuits have been filed seeking to block the regulations, at this time, employers should be prepared for implementation on December 1.
Under existing law, in order to be properly classified as exempt from overtime under any of the white collar exemptions, an employee must meet both a duties test (i.e., his or her primary job duties must meet certain minimum requirements) and a salary basis test (i.e., he or she must be paid a fixed salary each week that is not subject to deduction based on the quantity or quality of work). For many years, the minimum weekly salary to meet the FLSA salary basis requirement was only $455 per week. Continue reading “The Regs They Are a-Changin’: Are You Ready?”