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Smart Benefits: Employers - Expect New Overtime Regulations Soon

Monday, May 16, 2016

 

The DOL is expected to publish a final rule soon that will update which executive, administrative and professional employees are entitled to the Fair Labor Standards Act’s minimum wage and overtime pay protections, and when it does, employers will have to act quickly to comply.

Last year, the DOL proposed a rule that would revise the overtime exemption regulations of the FLSA. If approved as submitted, the salary level for white collar exemptions will increase from the current minimum of $455 a week, or $23,660 annually, to the salary level at the 40th percentile of weekly earnings of full-time salaried workers, which the DOL estimates would be $970 a week, or $50,440 a year, in 2016.  That means employees who are paid less than $50,440 would be eligible for overtime if they work more than 40 hours a week.

The DOL also proposed to set the highly compensated employee annual compensation level equal to the 90th percentile of earnings for full-time salaried workers, which is $122,148 annually. 

Since the DOL last updated the white collar overtime regulations in 2004, the proposed rule also establishes a mechanism for automatically updating the salary and compensation levels going forward to ensure they won’t again become outdated and ineffective between rulemakings.

The DOL submitted the final rule to the White House Office of Management and Budget for review in March, the final step before publication in the Federal Register. Once published, employers will have a minimum of 60 days to comply. 

Rob Calise is the Managing Director, Employee Benefits. of Cornerstone|Gencorp, where he helps clients control the costs of employee benefits by focusing on consumer driven strategies and on how to best utilize the tax savings tools the government provides. Rob serves as Chairman of the Board of United Benefit Advisors, and is a board member of the Blue Cross & Blue Shield of RI Broker Advisory Board, United HealthCare of New England Broker Advisory Board and Rhode Island Business Healthcare Advisors Council. He is also a member of the National Association of Health Underwriters (NAHU), American Health Insurance Association (AHIA) and the Employers Council on Flexible Compensation (ECFC), as well as various human resource associations. Rob is a graduate of Bryant University with a BS in Finance.

 

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