A Business-Minded Approach To Employment Law

Understanding the Dept. of Labor’s new overtime rule

On Behalf of | Oct 14, 2016 | Uncategorized |

Right now, business owners of all sizes are gearing up for the final push that typically precedes the end of the year. For some this means making sure inventory is stocked and positions filled for the impending holiday season, and for others it means meeting longstanding deadlines and fulfilling yearly sales goals.

This reality, coupled with the need to manage day-to-day operational concerns, means that business owners are now exceedingly busy. However, no matter how engaged they may be, they cannot afford to overlook an exceedingly important mandate from the U.S. Department of Labor slated to take effect on December 1.

Back in May, the DOL announced the publication of a new final rule designed to extend overtime protection to an estimated 4.2 million workers here in the U.S., including 331,000 here in Florida. In other words, the agency declared that as of December 1, these 4.2 million workers would be eligible for overtime pay.

Any discussion of the impending changes to the overtime pay rule, however, must be prefaced by a brief examination of what federal law, the Fair Labor Standards Act, currently requires from employers in terms of overtime.

At the moment, federal regulations dictate overtime pay — time-and-a-half — must be paid to all employees earning an hourly wage. As for those employees paid a salary, they are similarly entitled to overtime pay unless they meet the following three conditions:

  • They earn at least $23,660 per year, the current salary threshold established by the DOL (the salary level test), and
  • Their salary is both predetermined and fixed, such that it’s not subject to reductions related to work performance (the salary basis test), and,
  • Their job-related responsibilities are administrative, executive or professional in nature or, in simpler terms, white collar (the duties test)

In our next post on this important topic, we’ll discuss what exactly the DOL’s new rule calls for, how business owners can adjust, and the related legislation currently being advanced on Capitol Hill.

In the meantime, consider speaking with a skilled legal professional if you have questions about this issue, or your rights and responsibilities as an employer in general.