New FLSA Rule to Give Over Four Million Workers the Right to Overtime Pay
The Fair Labor Standards Act (“FLSA”) sets the minimum wage, overtime pay, recordkeeping, and other standards for employment across the nation. Though states may expand those rights and provide greater protections for their citizens, the FLSA sets the baseline standard that all employers (both public and private) must adhere to.
On May 18, 2016, the Department of Labor finalized a long-awaited new FLSA rule which will increase the overtime pay protections for many workers who are classified as “white collar” exempt. Specifically, the new rule increases the minimum salary and compensation levels needed to classify Executive, Administrative, Professional, Outside Sales, and Computer employees as exempt by:
- More than doubling the minimum salary cutoff for exemption from $23,660 annually (or $455 per week) to $47,476 annually (or $913 per week); and
- Establishing an automatic raise in that minimum salary level every three years to account for inflation.
The new rule will go into effect on December 1, 2016 (with the first automatic raise scheduled for January 1, 2020) and will require employers to either increase current exempt employee salaries in order to maintain their exempt status, or convert those employees to hourly workers covered by the overtime laws. It is estimated that the new rule will extend overtime pay protections to over four million workers within its first year of implementation.
For more information about your rights to overtime compensation, and a free consultation, please call us at (619) 342-8000.