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UPDATE: DOL Announces Final Rule on OT Changes

The Department of Labor today announced its final rule updating the federal overtime regulations governing white collar workers.The changes are set to go into effect December 1, giving employers less than 6 months to prepare. 

A summary of the changes has been released (read it here). 

Highlights of the final rule:

  • The new minimum salary threshold will be set at $913 per workweek, or $47,476 annually.This represents a decrease from the proposed amount, which had been $970 per workweek.

  • The highly compensated employee (HCE) salary threshold minimum will be set at $134,004 per year.

  • Every three years, the salary thresholds for the white collar employees and HCE’s will automatically increase, beginning on January 1, 2020.The DOL will post new salary levels 150 days in advance of their effective date.

  • The final rule will allow up to 10% of the salary threshold for white collar workers to be met by non-discretionary bonuses, incentive pay, or commissions, provided these payments are made on at least a quarterly basis.
  • The final rule does not make any changes to the duties tests.  (Employees must currently meet certain tests regarding their job duties.)

If employers have not done so already, they need to devise a long-term strategy now to manage the impact of these changes to the business and to workers. The first step is to gather employee exemption status and salary data, identify who will be affected and communicate any changes planned to employees.