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Possible Lower Overtime Salary Threshold Would Be Good News for Employers

Although the U.S. Department of Labor (“DOL”) has yet to release its final rule revisions for overtime regulations under the Fair Labor Standards Act (“FLSA”), new details about these highly anticipated changes are beginning to surface.

On Friday, April 29, 2016, sources familiar with the DOL’s deliberations indicated that the new salary threshold under consideration is $47,000, which nearly doubles the current threshold of $23,660. However, this newly projected threshold is down nearly 7% from earlier drafts of the proposed regulations, which suggested a salary threshold of $50,440.

This is good news for employers because it is expected to lower the number of employees subject to this new exemption by approximately one million. Nonetheless, this revised exemption threshold could extend overtime coverage to up to 23% of the white collar workforce (approximately 12.5 million salaried employees).

In addition to the lower salary threshold, the expected release date for these regulations has been in flux as well. Previously, these rules were expected to be finalized by July 1, 2016; however, information circulating now suggests that the final rules will likely be released by mid-May 2016. Based upon this knowledge, employers should be fully prepared to implement the new overtime exemption rules by mid-summer 2016, based on an estimated 60-day implementation timeline.

Assuming the final rule is issued by mid-May, we encourage you to join us for a Breakfast Briefing on Thursday, June 2, “How will the new FLSA rules on overtime exemptions impact your organization?”, to help your organization prepare to implement the new changes to the overtime exemptions and address other trending FLSA issues. Watch for your Evite next week!

You can read more about the proposed changes to the FLSA’s overtime regulations in our March 15, 2016 Legal Update on this topic. If you have questions now regarding your organization’s compliance with these new overtime regulations or other FLSA requirements, please contact Mary Hubacher at mhubacher@buelowvetter.com (262) 364-0254 or your Buelow Vetter attorney.

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