Dealing with DOL's new rules

How to make sense of DOL's revised overtime regulations

After much anticipation, the Department of Labor (DOL) has issued its new regulations governing payment of overtime to salaried employees, and the new regulations may affect your company.

Employees whose salaries are less than $47,476 per year will be entitled to overtime compensation as of Dec. 1 when the new regulations take effect. In addition, the salary threshold to determine overtime eligibility will be automatically updated every three years.

Background

The Fair Labor Standards Act (FLSA) requires employees to be paid overtime compensation at a rate of not less than 1 1/2 times the employee's regular rate of pay for hours worked over 40 in a workweek without regard to the employee's total compensation. However, salaried employees who qualify for FLSA's "white-collar" exemption for bona fide executive, administrative and professional employees are not entitled to overtime if three tests are met. Employees paid on an hourly basis are entitled to overtime regardless of their compensation.

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