Significant Change to Overtime Exemption Rule

Significant Change to Overtime Exemption Rule

By: Mitchell S. Chaban

 On May 18, 2016, the United States Department of Labor published its final overtime rule, which significantly increases the minimum amount of salary an employer must pay an employee in order for the employee to qualify as a “salaried exempt employee” under the executive, administrative, and professional exemptions from coverage under the Fair Labor Standards Act.  The rule, which will go into effect on December 1, 2016, increases the minimum compensation threshold to qualify for these exemptions from $455/week (or $23,660 annually) to $913/week (or $47,476 annually).

Employers should analyze the salaries of all employees who are treated as exempt before these significant changes take effect to ensure that they will meet the new minimum salary requirements beginning December 1, 2016, the effective date of the new rule.  Employers should also review employee exempt classifications to confirm that employees who are treated as exempt also meet the job duties tests of the particular exemptions.

If you have questions about how the final overtime rule may affect your business, please contact:

Mitchell S. Chaban at:

(312)368-0100 or mchaban@lgattorneys.com.

 

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