The new Fair Labor Standards Act or FLSA overtime rules are schedule to go into effect on December 1 – are you ready? Although 21 states and 9 advocacy organizations have filed lawsuits challenging the new rules, experts say that you shouldn’t bank of a last minute reprieve.
Meanwhile, Dana Wilkie of SHRM offers insight into how workers are reacting to being told about their reclassifications, noting that how they take the news depends on how they’re told, and on how hours, pay and timekeeping are structured: Reclassified Workers Have Mixed Reactions to New FLSA Overtime Regulations.
Here’s a rule recap, and a toolkit of what you need to know.
Key Provisions of the Final Rule – via DOL
“The Final Rule focuses primarily on updating the salary and compensation levels needed for Executive, Administrative and Professional workers to be exempt. Specifically, the Final Rule:
1. Sets the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South ($913 per week; $47,476 annually for a full-year worker);
2. Sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test to the annual equivalent of the 90th percentile of full-time salaried workers nationally ($134,004); and
3. Establishes a mechanism for automatically updating the salary and compensation levels every three years to maintain the levels at the above percentiles and to ensure that they continue to provide useful and effective tests for exemption.
Additionally, the Final Rule amends the salary basis test to allow employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.
The effective date of the final rule is December 1, 2016. The initial increases to the standard salary level (from $455 to $913 per week) and HCE total annual compensation requirement (from $100,000 to $134,004 per year) will be effective on that date. Future automatic updates to those thresholds will occur every three years, beginning on January 1, 2020.”
Additional guidance from HR Experts
4 Simple Things for HR Pros To Remember as Overtime Laws Change – Kris Dunn at HR Capitalist
Overtime Rules and Flexible Work – Marck McGraw, HRE Daily
Overtime Rules Still On Track — Are You Ready? – Daniel Schwartz, Connecticut Employment Law Blog
December 1, 2016 implementation date for overtime regs remains unchanged. Are you ready? – Maria Greco Danaher, Employment Law Matters