The Shoe Drops: DOL Releases Its New Overtime Final Rule

Department of Labor crestAfter months of anticipation by many employers, the DOL has released its Final Rule related to overtime this week. The Final Rule amends compensation levels for the Highly Compensated Employee (HCE) Exemption and the Executive, Administrative, and Professional (EAP) Exemptions. (The duties tests remain the same.) These levels were last updated in 2004.

The compensation for HCE will be set at an annual rate of $134,004, or equivalent to the 90th percentile of full-time salaried workers across the country. The EAP Exemption will be set at $47,476, indexed to the 40th percentile of the lowest-wage Census Region—at this time, the South. Importantly, the Rule also sets a method for updating the compensation levels automatically every three years to maintain the levels at those percentages.

By raising these pay thresholds, the Final Rule greatly increases the number of employees eligible for overtime protection. Many employers may modify the way they operate, taking measures to limit the work hours of employees or altering the structure of positions.

The changes become effective December 1, 2016. For more detail on the changes and how they may impact your operations, consult with employment counsel.

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About Andrew (Andy) Wampler

For over a decade, I have provided legal services to businesses and individuals in Northeast Tennessee. I spend time litigating breaches of contract, medical malpractice, and commercial disputes and have worked on a number of transactions. I also advise businesses, working much of my time on healthcare and employment matters.

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