On May 18, the U.S. Department of Labor (DOL) posted the Final Overtime Rule. The final rule amends the Fair Labor Standards Act (FLSA) and raises the minimum threshold in which all employees are entitled overtime pay for hours worked in excess of 40 hours per work week from $23,660 annually ($455 per week) to $47,472 ($913 per week). Some of the most significant points of the final rule include:
• Minimum salary threshold raised to $47,472 ($913 per week).
• Updates to the salary threshold every three years, first in 2020.
• Salary threshold based on the 40th percentile of earnings of full-time salaried workers in the lowest wage census region.
• Non-discretionary bonuses only account for 10 percent and must be reported quarterly.
• No changes to the “duties test” for the “white collar exemptions”.
• Final rule effective as of December 1, 2016.
Since the DOL published the proposed rule in July, 2015, NPMA has been very engaged on this issue, advocating for our members. NPMA submitted comments in September detailing our concerns with the proposed rule. NPMA is also working with the Partnership to Protect Workplace Opportunity (PPWO) to change the rule. PPWO is a broad coalition of national industries leading efforts to lobby Congress and DOL. The coalition is continuing to push federal legislation in the Senate and House, the Protecting Workplace Advancement and Opportunity Act. (S. 2707/H.R. 4773).
By Andrew Bray, JD, NPMA Director of Public Policy