• DOL Announces Final Rule Updating Overtime Exemptions
  • June 26, 2016 | Author: Shelby M. Exposito
  • Law Firm: Gust Rosenfeld P.L.C. - Phoenix Office
  • Yesterday the Department of Labor announced its final rule updating overtime exemptions. The rule will affect white collar workers, or those who are currently exempt from the FLSA's overtime provisions under the executive, administrative, or professional categories.

    For school districts, these changes will not affect teachers. In addition, the new rule does not take away the option for academic administrative employees to be exempt if their salary equals or exceeds the entrance salary for teachers in the district by which they are employed. The changes may, however, affect employees such as managers of non-academic departments.

    Currently, white collar employees must pass a duties test and a salary test to be exempt. The rule proposed last year set the minimum salary level at 40% of all U.S. employees. In the final rule, though, the level will be 40% of the lowest-earning geographic region. As a result, the minimum salary threshold will be $913 per week (equivalent to $47,476 per year for a full-year employee). This is much higher than the current $455 per week, but slightly lower than what the Department of Labor proposed last year. This salary amount will be updated every 3 years starting in January 2020.

    The rule will take effect on December 1, 2016, meaning employers must be in compliance by that date.