New Overtime Rules Coming in 2016: Employers Should Prepare Now

Date: January 07, 2016 Last Edit: January 20, 2016

Three months after the comment period closed on the proposal from the U.S. Department of Labor (DOL) to revise overtime rules, DOL issued its 2015 Semiannual Regulatory Agenda that includes a statement on the timing for a final overtime rule. According to the regulatory agenda, DOL expects to publish final regulations in July 2016.

The proposal generated nearly 300,000 comments, including comments from a variety of employers and trade associations like NFIB. View NFIB’s comments and opposition to the proposal here.

Under the proposal, the new rule would:

•    raise the salary exemption from $23,660 per year to $50,440 per year. This means that an employee making less than $50,440 per year would be eligible for overtime.
•    increase the total annual compensation requirement needed to exempt highly compensated employees to the annualized value of the 90th percentile of weekly earnings of full-time salaried workers ($122,148 annually); and
•    annually update the salary and compensation levels of exempt employees.

Experts are advising employers to start planning now for the new overtime rules by doing the following:

1.    Identify currently exempt jobs with salaries that fall below the proposed new salary threshold for exempt employees, using $970 per week, or $50,440 per year.
2.    For employees who may be reclassified as hourly employees, understand now how many hours they are working per week and determine if you can cap overtime.
3.    Think about what operational changes need to happen as a result of the reclassification of employees from exempt to nonexempt like changes to job duties, changes to schedules, or changes to staffing levels.
4.    For positions that often result in overtime pay, consider hiring more full-time, part-time and/or seasonal employees, or job restructuring to offset expansion of overtime pay.

NFIB will continue to provide updates on the status of the new rules, but to keep up with the latest you can always visit www.nfib.com/legal.

Watch now: Beth Milito of NFIB’s Small Business Legal Center explains how to get ready for the new overtime rules >>

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