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Last Wednesday, the U.S. Department of Labor (DOL) announced updates to overtime regulations, which extends overtime eligibility to over 4 million workers. President Obama directed the Department to update the regulations in 2014. Employers have until December 1, 2016 to comply. Key highlights are as follows:
- The salary threshold will be increased to $47,476 annually ($913/week)—an increase of slightly more than 100% from the current threshold of $23,660 annually ($455/week). The proposed level was $50,440 annually.
- There will be no changes to the duties test. The DOL had indicated it was considering adding a quantification component similar to California’s that would have required employers to show an employee was performing exempt duties a certain percentage of time to qualify under the specific exemption.
- The salary threshold will be updated every three years and tied to the 40th percentile of full time salaried workers in the lowest wage region of the country (currently the Southeast).
- Employers can use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.
Detailed information including fact sheets for non-profit organizations, higher education, and local governments can be found on the DOL’s website. Informational webinars are also scheduled. The Chamber is working with its partners, including ChamberChoice, to provide additional resources for members. Legislation has been introduced in both the House (H.R. 4773), and Senate (S. 2707), which would block these new rules.