Overtime Pay Rules to Change
Update from the Editors: The new overtime rules that were set to take effect on December 1 have been put on hold after a nationwide injunction was handed down on November 22 by a federal judge in Texas. Read more about the injunction here.
The federal Fair Labor Standards Act (FLSA) requires that most employees in the United States be paid at least the federal minimum wage for all hours worked and overtime pay at time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek. The overtime and minimum wage rules apply broadly to private-sector workers. However, there are some exceptions to these rules, which the US Department of Labor (DOL) has the authority to define through regulation. One of the most commonly used exemptions is for "executive, administrative and professional" employees, the so-called "white collar" exemption.
Workers who are paid hourly wages or who earn below a certain salary are generally protected by overtime regulations, while those above the threshold who perform executive, professional, or administrative duties are not. That threshold has been updated twice in the last 40 years, leaving millions of low-paid, salaried workers without these basic protections. However, in May, the DOL finalized an update to that threshold, which goes into effect on December 1, 2016. This update increases the overtime threshold amount for exempt salaried employees, from the current $23,660 a year (or $445 a week) to $47,476 a year (or $913 a week).