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New Overtime Rules Increase Salary Threshold

It has been over 12 years since the Fair Labor Standards Act (FLSA) was last amended. In 2004, a Final Rule increased the salary level an employee must be paid to come within the standard test for an Executive, Administrative or Professional exemption (EAP, also known as the white collar exemption) from minimum wage and overtime requirements to $455 per week. At that time the Department of Labor (DOL) also modified required duties tests for meeting the exempt from overtime status and created an exemption for highly compensated employees (HCEs).

After issuing proposed rules in 2015, the DOL recently released its 2016 Final Rule, which is aimed at expanding overtime eligibility for millions of American workers. The Final Rule increases the minimum salary employers must pay white collar workers to maintain their exempt status to $913 per week, but does not make any changes to the job duties test. Employers have until December 1, 2016 to comply.   The Chamber’s member benefits provider, ChamberChoice, has provided a summary of the key provisions of the new overtime rule. The U.S. Department of Labor has held several webinars explaining the changes, which are archived for viewing.  If employers have any remaining questions, they are advised to contact an attorney for clarification.

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