This morning the Department of Labor issued its highly-anticipated Final Overtime Expansion Rule.  The Final Rule, which takes effect on December 1, 2016:

  1. Raises the minimum salary level from $455 per week (the equivalent of $23,660 per year) to $913 per week (the equivalent of $47,476 per year), $3,000 less than the $50,440 salary originally proposed by the DOL in 2015.
  2. Raises the minimum annual compensation for highly-compensated employees who are subject to a more minimal duties test from $100,000 to $134,004.
  3. 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.
  4. Establishes a mechanism for automatically updating the salary and compensation levels every three years, with the first update to take place in 2020.

The Final Rule does not include any changes to the duties tests, which also affect the determination of who is exempt from overtime.

The Fact Sheet for the Final Rule can be found here, and the DOL’s Guidance for Private Employers on Changes to the White Collar Exemptions in the Overtime Final Rule can be found here.

Keesal, Young & Logan Employment Group

This information has been prepared by Keesal, Young & Logan for informational purposes only and is not legal advice. Transmission of the information is not intended to create, and receipt does not constitute, an attorney-client relationship between you and Keesal, Young & Logan. You should not act upon this information without seeking professional counsel.