Department of Labor Overtime Rule

New DOL Overtime Rule – Things You Need Know

OCT 4, 2016 UPDATE: The U.S. House of Representatives recently passed a bill to delay implementation. Read more here.

  1. Salary threshold has increased to $47,476 ($913 a week). This has more than doubled the overtime threshold and is estimated to impact 4.2 million salaried employees who are classified as exempt.

  2. Duties test is unchanged. This is the basic test for determining who in your organization remains exempt from the overtime eligibility. It currently stands as:
  3. • The employee must make over the new salary threshold of $47,476;
    • The employee must be salaried;
    • The must perform exempt duties (executive, administrative or professional).

  4. Salary threshold will automatically increase every 3 years to keep up with inflation. Based on wage growth projections, the threshold is expected to rise to more than $51,000 with the first update on January 1, 2020.

  5. Deadline to implement and comply with the new rule is December 1, 2016.

  6. Up to 10 percent of the salary can come from bonuses or commissions. A salaried employee’s bonuses or commissions can satisfy up to 10 percent of the minimum threshold for the overtime exemption. They must be non-discretionary and paid on a quarterly or more frequent basis.

  7. The DOL recently created 115 frequently asked questions to provide more clarity around the upcoming December 1, 2016 deadline – read them here.