The Employer's Guide · 2018-01-12 · The Employer's Guide: FLSA Overtime Rule Changes The new...
Transcript of The Employer's Guide · 2018-01-12 · The Employer's Guide: FLSA Overtime Rule Changes The new...
The Employer's Guide: FLSA Overtime Rule Changes
The new rules extend overtime pay protections to 4.2 million professional, administrative and executive employees.
On May 18, 2016, the Department of Labor announced new overtime rules under the Fair Labor and Standards Act.
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1Sets the standard
salary level at $913 per week; $47,476
annually for a full-year worker.
2Sets the total annual
compensation requirement for highly
compensated employees at
$134,004.
3Establishes a
mechanism for automatically
updating the salary and compensation levels
every three years.
The salary threshold is expected to be higher than $51,000 by January 1, 2020, the date of the first automatic update.
THE RULES
Salary level is not a minimum wage requirement.
It determines which employees will be exempt or nonexempt.
According to the Labor Department’s guidance, there are four ways to comply with the overtime rules:
1Raise salaries to maintain minimum exemption
2Pay current salaries, with overtime after 40 hours
3Reorganize workloads, adjust schedules or spread work hours
4Adjust Wages
Converting Salary to Hourly Wage: Hourly Rate = Salary ÷ (40 + (OT hours x 1.5))
7.4 million organizations
will be a�ected by these new
rules. The Labor Department
estimates these groups will spend
$592.7 million in order to comply
with the rules by deadline.
Employers must comply with the
new rules by
December 1, 2016
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