HR Management & Compliance

New overtime regulations require $47,476 salary for exemption

By Susan Prince, JD, M.S.L., Legal Editor

The federal Department of Labor (DOL) is releasing the final changes to the overtime regulations. The most prominent change is the increase in the salary level required for exemption from overtime to an annual salary of $47,476. This translates to a weekly salary of $913.

This means that your employees who currently earn more than $455 per week ($23,660 annually), but less than $913 per week, need to be reclassified as nonexempt and will be entitled to overtime for any hours worked over 40 in a week. The final rule will take effect on December 1, 2016.

The DOL is increasing salary level for employees in American Samoa to $767 per week. In addition, the “base rate” for employees in the motion picture industry will increase to $1,397 per week.

According to the DOL, this will raise Americans’ wages by an estimated $12 billion over the next 10 years, with an average increase of $1.2 billion annually. Additionally, the DOL states that this change will extend overtime protections to 4.2 million additional workers who are not currently eligible for overtime under federal law.

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