U.S. Dept. of Labor Issues New Rules for Overtime Pay

Effective December 1, 2016, new rules will be in effect to cover overtime pay requirements. The long-anticipated changes were the subject of numerous comments after they were proposed in 2015. They focus on updating the salary thresholds for overtime pay purposes and include the following:

  1.  An increase in the minimum salary that must be paid to white collar workers who otherwise are exempt from overtime pay requirements, from $455/week to $913/week ($47,476 per year). Workers who make less than these amounts must receive overtime, regardless of other factors;
  2. An increase in the ‘highly paid’ employee exemption for white collar workers from $100,000/year to $134,004/year. Workers whose earnings exceed these amounts will be exempt from overtime pay; and
  3. A mechanism for automatically adjusting the minimum and highly paid thresholds to keep up with inflation.

The Department expects the changes to cause 4 million new workers to qualify for overtime pay. The changes have been in the works since 2014, when President Obama instructed that the regulations be updated. After publishing proposed rules, the Department received nearly 300,000 comments.