The long-awaited FLSA overtime regulations were published on May 17, 2016. Much to the relief of HR Professionals, the new rules will not go into effect until December 1, 2016. This gives employers nearly 200 days to comply after the rule's final publication, longer than the 60 days the DOL earlier proposed.
The regulations doubled the salary threshold. The new minimum salary threshold for overtime exemption will be $47,476 per year, up from $23,660. The final rule allows up to 10 percent of the salary threshold for non-highly compensated employees to be met by non-discretionary bonuses, incentive pay, or commissions, provided these payments are made on at least a quarterly basis.
The new threshold is not static and will change every three years, beginning January 1, 2020. Updating the threshold every three years is also a major revision from the 2015 proposal, which called for annual indexing. Each update will raise the standard threshold to the 40th percentile of full-time salaried workers in the lowest-wage Census region, estimated to be $51,168 in 2020.
The final rule does not make any changes to the “duties test” that determines whether white collar salaried workers earning more than the salary threshold are ineligible for overtime pay.
The regulation also raised the highly compensated employee threshold to $134,004 from $100,000. This is the level above which “only a minimal showing is needed to demonstrate an employee is not eligible for overtime.”
The DOL also provided guidance on higher education (https://www.dol.gov/whd/overtime/final2016/highered-guidance.pdf ) and nonprofit employees (https://www.dol.gov/whd/overtime/final2016/nonprofit-guidance.pdf)
There are still many unanswered questions that will be ferreted out in future updates.