UAC Legislative/Regulatory Alert - May 20, 2016
Important regulatory and legislative information for
- US Department of Labor:
Final Rule updating overtime regulations.
Your company may be significantly impacted by the new
overtime rule. Starting December 1st employees who make less
than $913 a week ($47,476) are entitled to overtime pay for all
hours worked over 40 in an administrative workweek (ie no longer
considered salaried exempt).
Appropriations Renewal : Please request
Congress to renew the temporary H-2B relief provided in the Fiscal
Year 2016 Consolidated Appropriations Act (P.L. 114-113) to allow
small and seasonal businesses to continue to operate next year.
Practical approaches to dealing with the Overtime Rule
consulting attorney Lynn Stewart, Schreeder, Wheeler & Flint, LLP will
be included in the July/August UAC
Magazine. UAC thanks Ms. Stewart for her
diligence in providing this information to UAC members.
Please contact me for additional information
Wage and Hour Division (WHD) - Final Rule: Overtime
Defining and Delimiting the Exemptions for Executive,
Administrative, Professional, Outside Sales and Computer Employees
under the Fair Labor Standards Act
On May 18, 2016, President Obama and Secretary Perez
announced the publication of the Department of Labor's final rule updating the overtime
regulations, which will automatically extend overtime
pay protections to over 4 million workers within the first year of
Key Provisions of the Final Rule
The Final Rule focuses primarily on updating the salary
and compensation levels needed for Executive, Administrative and
Professional workers to be exempt. Specifically, the Final Rule:
- Sets the
standard salary level at the 40th percentile of earnings of
full-time salaried workers in the lowest-wage Census Region, currently
the South ($913 per week; $47,476 annually for a full-year
- Sets the
total annual compensation requirement for highly compensated
employees (HCE) subject to a minimal duties test to the annual
equivalent of the 90th percentile of full-time salaried workers
nationally ($134,004); and
a mechanism for automatically updating the salary and compensation
levels every three years to maintain the levels at the above
percentiles and to ensure that they continue to provide useful and
effective tests for exemption.
Additionally, the Final Rule amends the salary basis test
to allow employers to use nondiscretionary bonuses and incentive
payments (including commissions) to satisfy up to 10 percent of the new
standard salary level.
The effective date of the final rule
is December 1, 2016. The initial increases to
the standard salary level (from $455 to $913 per week) and HCE total
annual compensation requirement (from $100,000 to $134,004 per year)
will be effective on that date. Future automatic updates to those
thresholds will occur every three years, beginning on January 1, 2020.