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Limiting white-collar exemptions is likely to increase class-action suits under the Fair Labor Standards Act
Update: Overtime Rule on Hold
On Nov. 22, 2016, a federal district court judge in Texas placed an injunction, effective nationwide, on the Department of Labor’s overtime rule revision, preventing it from taking effect on Dec 1. The injunction casts doubt on whether the revised rule will go forward at all (see the
SHRM Online article
Federal Judge Halts Overtime Rule). For now, the rule’s implementation and enforcement are on hold.
SHRM Online will continue to monitor and report developments.
Final Overtime Rule Takes Effect Dec. 1, 2016
The Department of Labor’s
final rule revising the Fair Labor Standards Act overtime regulations was released on May 18, 2016. The new rules take effect on Dec. 1, 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.
FLSA Overtime Rule Resources page.)
Changes to Salary-Level Test
Changes to Duties Test Possible
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