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Limiting white-collar exemptions is likely to increase class-action suits under the Fair Labor Standards Act
Update: The Department of Labor’s final rule revising the Fair Labor Standards Act overtime regulations was released on May 18, 2016.
Under the final rule:
• The annual salary threshold for exempt positions will jump from $23,660 to $47,476 (or from $455 to $913 per week) , and will be updated every three years. That’s less than the proposed rule’s $50,440 annual amount, but more than double the old threshold.
• There will be no change in the duties test used to determine whether employees earning more than the salary threshold must be classified as nonexempt from overtime, including the exemptions for executive, administrative and professional positions, among others.
• For highly compensated employees (HCEs), who may generally be considered exempt without regard to the duties test, the final rule raises the annual HCE salary threshold from $100,000 to $134,004.
The new rules take effect on Dec. 1, 2016.
(See SHRM Online’s FLSA Overtime Rule Resources page.)
This article was revised on 7/10/2015.
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