Did you know new overtime rules go into effect December 1st?
November 23, 2016 Update: Some of the information contained in the following article, published on November 4, 2016, is no longer accurate, as a federal judge has ruled against the new overtime regulations. The regulations, which were to go into effect on December 1, 2016, have been suspended until further notice. For more information, view our latest update here.
That's right. It's official. New overtime rules are coming your way.
And they go into effect December 1, 2016.
The Backdrop
The Fair Labor Standards Act (FLSA) sets the stage for minimum wage and overtime pay standards affecting employees in both public and private sectors. In 2014, President Obama signed a Presidential Memorandum urging the Department of Labor to update the regulations defining which white collar workers are protected by the FLSA's minimum wage and overtime standards.
Then, on May 18th of this year, we heard from President Obama and Secretary Perez, who announced that the much-anticipated rule that will update overtime regulations had been published by the Department of Labor.
The Impact
This one's going to affect workers and business owners alike. The Department of Labor states that, when the rule goes live, "[it] will automatically extend overtime pay protections to over 4 million workers within the first year of implementation."
Naturally, employers will be affected too. Many employers do not track hours for exempt salaried employees. But those who are defined as "exempt" will change. The new threshold for exemption has increased from $455 to $913 per week (or, $47,476 annually). In other words, employers will need to start tracking hours for a much greater portion of their workforce to ensure they're complying with the new overtime rule.
Continued Reading
While we've given you the gist here, we recommend you read up on the entire scope of impact this rule will have on you or your business.
From the Department of Labor:
Final Rule: Overtime
Fact Sheet
Questions and Answers