Rule Changes Released to Fair Labor Standards Act Overtime Regulations

Today, May 18, 2016, changes to the Fair Labor Standards Act (FLSA) overtime regulations were released. It is anticipated that approximately four million workers will now be extended overtime pay within the first year of implementation.

Key FLSA rule changes:

• The minimum salary level to be considered exempt as an executive, administrative, or professional (“white collar”) worker will increase to $913 per week, or when annualized, to $47,476 per year.
• The total annual compensation threshold for highly compensated employees will increase to $134,004.
• A mechanism for automatically updating the salary and compensation levels every three years has been established.
• Nondiscretionary bonuses and incentive compensation (including commissions) can be used to satisfy up to 10% of the new standard salary test level.
• The duties test remains unchanged.

Effective date of rule changes:  December 1, 2016.

If you have any questions, please contact Julia Johnson or your Wipfli relationship executive.