Late last month the Department of Labor unveiled the new overtime regulations. The Chamber joined other business organizations under the leadership of the U.S. Chamber to weigh in on the rules during their comment period late last year. Here are the bullet points of the new rules:

  • The salary threshold will be increased to $47,476 annually ($913/week)-an increase of slightly more than 100% from the current threshold of $23,660 annually ($455/week).
    • The proposed level was $50,440 annually ($970/week).
  • There will be no changes to the duties test.
    • The DOL had indicated it was considering adding a quantification component similar to California’s that would have required employers to show an employee was performing exempt duties a certain percentage of time to qualify under the specific exemption.
  • The salary threshold will be updated every three years and tied to the 40th percentile of full time salaried workers in the lowest wage region of the country (currently the Southeast).
    • The proposal had the automatic updates happening annually but was unclear on the methodology for the updates.
  • Employers will have until December 1, 2016 to come into compliance with the new requirement-a period of about 200 days.
    • The proposal did not include an implementation period but there were suggestions it could be as short as 60 days.
  • No indication about how commissions/bonuses/incentive based pay will be treated.
    • The DOL sought comments on whether to give a 10% credit for these types of compensation.

For further information, check out the US Chamber blog.

The fight over this rule-making is not over. Republican lawmakers in Congress have vowed to block the rule during a mandated congressional review period, with backing from business groups and a court challenge may also be in the works. Employers would be wise however to plan for how to comply with the current rule in case those efforts fail or do not take place in time to affect the December 1st effective date.

Click here to download full version of the Grand Junction Area Chamber of Commerce June 2016 Newsletter.

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