United States Department of Labor Releases the
Final New Rules on Overtime Pay
On May 18, 2016, the U.S. Department of Labor (DOL) released the
much anticipated final rules regarding who is and who is not eligible
to be paid overtime. The new rules primarily affected the salary
threshold which all employees must meet in order to be classified
as “exempt” from being paid overtime.
The new salaried level is $47,476 per year or $913.00 per week
(the current threshold is $23,660). This new threshold goes into
effect for all employers on December 1, 2016. Any employer which
has an employee who is making less than $47,476 per year, as of
December 1, 2016, that employee must be reclassified to an hourly
employee and paid on an hourly basis. If the employee works more
than 40 hours within a one week period of time, the individual
must be paid overtime at the rate of one and one half times his/her
normal rate of pay.
The new rules also mandate that the salary level will automatically
increase every three (3) years.
The DOL estimates that these changes will result in 4.2 million
additional workers being eligible for overtime pay. Employers must
quickly review those employees who are presently classified as
exempt (not eligible for overtime pay) to determine if a salary
adjustment is necessary or if the employee needs to be reclassified
A company’s best defense against
the potential expense and aggravation related to federal or state
law violations is to proactively review and revise as needed their
Human Resources policies, handbooks, hiring procedures, compensation,
benefits, training programs, communications tools and other functions.
The professionals of PHHR are ready to assist your organization
maintain compliance with the latest state and federal mandates.
Paul Hilton Human Resources Consulting works with our clients to insure that all required documentation is correct and sufficient to successfully defend against a claim to any unemployment compensation commission.
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issues, please Contact Us.
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