Overtime Rule Effective December 1, 2016

On May 18, 2016 the Administration announced the release of the Final Rule from the Department of Labor regarding overtime regulations for workers and organizations.  According to the Department of Labor website, Key Provisions of the Final Rule are:

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.
4. 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.
5. 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.

To read the fact sheet for non-profits please visit https://www.dol.gov/sites/default/files/overtime-nonprofit.pdf
To read the guidance for non-profits please visit https://www.dol.gov/whd/overtime/final2016/nonprofit-guidance.pdf

Free Department of Labor Webinars about the Overtime Final Rule

June 2, 2016, 1:00pm - 2:30pm, EST https://goo.gl/o6AnXn

June 9, 2016, 1:00pm - 2:30pm, EST https://goo.gl/6V5WSO

[Source: National Association of Free and Charitable Clinics]