Michael Santo

Michael Santo – Bechtel & Santo

In spite of objections raised by members of the business community nationwide including this Chamber, the U.S. Department of Labor finalized updated overtime rules in May and all businesses will be expected to comply beginning December 1, 2016. While key provisions are shown below there are still a lot of questions about how to apply the rules and which workers will be subject to overtime. Michael Santo, Bechtel & Santo, recently offered a one-hour brown bag session on the rule.

Key Provisions of the Final Rule:

  • The Final Rule focuses primarily on updating the salary and compensation levels needed for Executive, Administrative and Professional workers to be exempt. Specifically, the Final Rule:
  • Sets the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South ($913 per week; $47,476 annually for a full-year worker);
  • Sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test to the annual equivalent of the 90th percentile of full-time salaried workers nationally ($134,004); and
    Establishes a mechanism for automatically updating the salary and compensation levels every three years to maintain the levels at the above percentiles and to ensure that they continue to provide useful and effective tests for exemption.

Additionally, the Final Rule amends the salary basis test to allow employers to use non-discretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.

If you were unable to attend the session in person, click here to view a recording of the session.

Thank you to Chamber member Cranium 360 providing recording services.

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