NEW FLSA OVERTIME EXEMPTION RULES ARE OUT!

NEW FLSA OVERTIME EXEMPTION RULES ARE OUT!

$47,476 is the new annual salary threshold required to qualify for the executive, administrative, and professional exemptions under the Fair Labor Standards Act.  Furthermore, the salary thresholds will automatically increase every three (3) years, beginning in January 2020.  The Department of Labor (“DOL”) will set updates based on the 40^th percentile of earnings of full-time salaried workers in the lowest-wage census region.

Additionally, the final rule amends the salary basis test to allow employers to count discretionary bonuses and incentive payments to satisfy up to 10% of the new salary level.

The new regulation also increased the total annual compensation requirement needed to exempt highly-compensated employees (“HCE”) to $134,004 annually.  The New Rule does not permit employers to count discretionary bonuses and incentive payments to satisfy the HCE threshold amounts.

What Should Employers Do Now?

The stated effective date of the New Rule is December 1, 2016.

Now that Employers know the salary level, they should take the following steps:

1. Identify potentially affected employees.
2. Analyze job classifications and duties, and update job descriptions as necessary.
3. Assess whether to convert any position to non-exempt, or raise the salary level, and/or engage in some restructuring of the organization.
4. Adopt and implement a strategy for compliance by December 1, 2016.

Employers may also want to take this time to review ALL of their exempt positions to ensure these positions meet the necessary duties tests to fall within a given exemption.

For more information on the Fair Labor Standards Act New Rule or other human resources needs, please contact Clemans Nelson at 1.800.282.0787 or contact one of our regional offices:

Akron 330.785.7700 | Cincinnati 513.583.9221 | Columbus  614.923.7700 | Lima 419.227.4945