Salary Raised for Overtime Exemptions

The Fair Labor Standards Act established minimum wage, overtime pay eligibility, child labor standards and recordkeeping regulations. It set rules for workers in the private sector, federal, state and local governments so they could be paid fair wages for their overtime work. In 2014, President Obama directed the Secretary of Labor to update the overtime regulations with the argument that they no longer reflected the intent of the Fair Labor Standards Act.

On May 16th 2016, President Obama and Secretary Perez announced the final ruling on updating the overtime regulations. The new regulations are set to put protections in place for other 4 million working Americans within the first year. Today many white-collar professional workers work several hours more than a 40-hour workweek without seeing a single cent of overtime due to outdated overtime regulations. The new regulations would increase the overtime-exempt salary threshold from $455 a week to $913 or $47,476 a year. The rule also requires the Department of Labor to update the salary threshold every three years based on wage growth overtime.

Increasing the threshold gives employers the following options:

  • Pay time and a half for overtime work
  • Raise employees’ salaries above the new threshold
  • Require employees to limit their workweeks to 40 hours a week.
  • Create a combination of all the above options

In addition to increasing the salary for overtime exemption, the final ruling also sets the total compensation for high earning employees to the annual equivalent of the 90th percentile for annual salaried workers. This ruling goes into effect on December 1st 2016, which gives employers six months to comply with regulations.

If you feel your overtime rights are being violated after this ruling goes into effect, you should contact the legal team at Polaris Law Group. OurHollister employment law attorneys can help you get the compensation you deserve for your hard work.

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