Department of Labor Issues New Overtime Rule

A proposed Department of Labor rule would challenge overtime payment strictures.

The U.S. Department of Labor last week released its Final Rule concerning the expansion of federal overtime obligations for employers. The new overtime rule will go into effect on December 1, 2016, and will have substantial effect on employer pay practices.

The biggest change will be a higher minimum salary needed to rely upon one of the so-called white collar exemptions. The minimum salary necessary for those employees in positions meeting the bona fide executive, professional and administrative exemptions was more than doubled from $23,660 to $47,476.

In addition, for employees who are exempt under the so-called “highly compensated employee” exemption, the minimum compensation has been raised from $100,000 to $135,004 per year.

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