New Department of Labor Overtime Exemption Rule Announced

A new Department Of Labor (DOL) exemption rule was released recently and it will take effect on December 1, 2016.  The new rule expands overtime protections (by taking away exempt status) from 4.2 million workers.  It is expected to cost employers $12 billion dollars over the next 10 years.
 
Specifically the new DOL Exemption Rule:
1. Doubles the salary basis threshold from $23,660 to $47,476 (slightly less than the $50,000 in the proposed rule) from $455 a week to $913 minimum a week;

2. The salary basis will be automatically updated every three years (instead of every year as in the proposed rule), it is expected to rise to $51,000 with the first update on January 1, 2020;

3. Raises the "highly compensated employee" threshold from $100,000 to $134,004 (higher than the $122,000 in the proposed rule);
 
4. No changes to duties tests (for determining if employee completes executive, administrative or professional duties within the organization)
 
5. Allows bonuses and incentive payments to count toward up to 10 % of the new salary level.
 
Now is the time to examine your workforce, to determine which employees will remain exempt, which will need to be reclassified, and how to explain that to them.  This is also a time of opportunity to correct prior misclassified employees.  

Learn more online nmichiganbusiness.com/2016/05/20/dept-of-labor-releases-final-overtime-regulations/