The new rules will allow many "white-collar" workers to exceed the time

The US Department of Labor (DOL) issued a new rule to automatically extend the overtime allowance payment and automatically extend the eligibility of extended wages to an estimated 42 million workers. Under the new regulation going into effect on December 1, 2016, most salary workers earning $ 913.00 per week ($ 47,476.00 per year) are entitled to collect overtime pay. This newly defined salary level is more than twice the current amount (455.00 dollars a week or 23,660.00 dollars a year) and workers are usually considered to be exempt from overtime regulations.

A brief overview of the Fair Labor Standards Act (FLSA) will help you understand what is going on here. FLSA requires employers to pay at least their employees the minimum Federal Minimum Wage (currently $ 7.25) within working hours and for all hours working above 40 hours, 1.5 times weekly wage. Certain types of employees are exempt from the scope of the law, including doctors, lawyers and teachers. In addition, FLSA exempts not to target employees engaged in "officers, managerial positions or professionals". Such workers have historically been called "white-collar workers". However, the law itself does not define the terms "executive" "administrator" or "professional" but leaves it to DOL to issue regulations that eliminate the scope of these exemptions.

Under current DOL regulations, employees are required to meet each of the following three tests in order to be eligible for white-collar exemption. (1) A fixed fixed salary will be paid. The work performed ("pay-based test"). (2) Employee's salary amount meets the minimum specified amount ("Salary Level Test"). (3) Employee's obligations pertaining to execution, administration or duties as defined in the DOL's provision ("Test of business performance"). Recently issued rules will affect the second "salary level test" of these tests.

Therefore, most white-collar workers who have earned a lower salary than the "standard salary level" of 913.00 dollars per week since December 1, when the new rules apply, will receive 40 hours for a given working week There is a right to overtime work that is over working. Whether or not these employees meet the other two tests of white-collar exemption, it will be that case. This standard salary level is currently determined based on the 40th percentile of the income of a packed worker in the minimum wage area in the south. After that, the standard salary level will be adjusted every 3 years. It is based on the 40th percentile of full-time salary workers.

Employers are permitted to use indefinite bonuses and incentive payments (such as responsibilities) to meet up to 10% of standard salary levels. However, these payments are made quarterly.

Finally, this new regulation also affects people who are legally considered "highly compensated employees" (HCE). Employees currently with an annual income of $ 100,000.00 or more will be exempt from overtime rules even if they do not satisfy the "performance test of duties". As the new rules come into effect, the dollar amount to qualify as HCE will increase to $ 134,004.00.

DOL estimates that approximately 4.2 million workers currently considered exempt based on FLSA are forced to work overtime in the first year of implementation of these new rules. It is expected that this figure will be expanded to over 5 million employees within 10 years after implementation. In the first year after the rule change, an additional 65,000 HCEs are estimated to qualify for overtime and 200,000 will be affected within 10 years.

Clearly, many employers are affected by these changes and employers are encouraged to obtain knowledge about how these new rules affect pay management practices.