Department of Labor finalizes new overtime rule
By Doug Chartier
LAW WEEK COLORADO
The long-anticipated leap in the white-collar exemption threshold now has an effective date, meaning employers now have a deadline for the myriad adjustments they must make to comply with the Department of Labor’s new federal overtime rule.
On Wednesday, the Labor Department published its finalized rule changing the standards for exempted employees under the Fair Labor Standards Act, making a large population of additional workers eligible for overtime pay.
“This long-awaited update will result in a meaningful boost to many workers’ wallets, and will go a long way toward realizing President (Barack) Obama’s commitment to ensuring every worker is compensated fairly for their hard work,” according to the Labor Department’s announcement. The new ceiling will extend overtime eligibility to more than 4 million U.S. workers within the first year it is effective, the department said.
Under the FLSA, workers aren’t required to receive overtime pay if they fall under the act’s white-collar exemption for executive, administrative, professional, outside sales and computer employees. Employers classify workers as exempt or non-exempt according to the FLSA’s duties test for white-collar exemption and if their annual salary meets a certain threshold, which is currently set at $455 per week, or $23,660 per year.