New Overtime Regulations Closer to Reality

The long-awaited new overtime regulations took a big step forward this week when the Department of 600px-US-DeptOfLabor-Seal_svgLabor submitted the proposed final regulations to the White House Office of Management and Budget for final review and approval.  This last step in the review process is anticipated to take up to 90 days, with the final regulations anticipated sometime during Q2.

As we noted in our post on June 30, 2015, the proposed regulations more than double the minimum salary requirement for the “white collar” overtime exemptions (administrative, professional and executive) from $455/week ($23,660/year) to approximately $970/week ($50,440/year), with annual increases thereafter based on a to-be-determined index.  The proposed regulations also increase the minimum salary for the Highly Compensated Employee exemption from $100,000/year to more than $122,000/year (though it is important to note that this exemption does not apply under some states’ overtime laws).  Finally, while the proposed regulations did not change the job duties tests, they did suggest that the final rules may impact the job duties tests in addition to the minimum salary requirement.

There are various strategies available to businesses to minimize the financial, operational and employee-relations impact of the new regulations, but it is important to act quickly to consider available options for impacted employees.  Companies should also consider whether other changes to exempt status classifications make sense, as the regulatory change is a good opportunity to improve compliance across the board.

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