• The DOL’s “New” Overtime Rules Are Here

  • The Department of Labor (DOL) released its final overtime pay rule.  A fact sheet on the rule from the White House can be found here

    Highlights of the rule are:

    • On December 1, 2016, the salary threshold below which employees are entitled to overtime pay will increase from $455 per week/$23,660 per year to $913 per week/$47,476 per year.  The salary threshold in the proposed rule was $970 per week/$50,440 per year, so this is a small decrease.  However, it still represents a 100% increase in the salary threshold since the last increase in 2004.
    • The salary threshold for highly-compensated employees will increase from $100,000 to $134,004.  Employees who earn more than this threshold are generally considered exempt from overtime pay.
    • The salary threshold will be automatically updated every three years, starting in 2020.  As you may recall, DOL originally proposed automatically updating the threshold annually, and in our comment letter ACEC suggested that every three years would be more reasonable.
    • There are no changes to the duties test for the executive, administrative, and professional exemptions for employees who earn more than the salary threshold.  ACEC advocated for maintaining the current duties test, and the new rule reflects our position.
    • Bonuses and incentive payments can count toward up to 10% of the new salary threshold.  This is calculated on a quarterly basis.

    Please let us know how this rule will impact your firm and employees, so that we can continue to advocate as needed on this issue.

    Questions on this rule, contact Katherine Motley at 202-347-7474.