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DOL Has Published the Amended FLSA (Overtime) Regulations — Employers Must Comply By December 1, 2016

If you have employees who are (1) classified as exempt (salaried) and earn less than $47,476 a year in base salary; (2) work more than 40 hours a week; or (3) earn significant amounts of compensation from nondiscretionary bonuses or commissions, you will want to develop a game plan to comply with the recently published amended Fair Labor Standards Act (FLSA) regulations, which will  go into effect on December 1, 2016.

The FLSA requires that almost all employers pay (1) at least the minimum wage and (2) overtime pay for any employee that is not exempt from the FLSA and who works more than 40 hours in the defined work week.

The key provisions of the recently published amended FLSA regulations are:

  1. exempt employees must be paid a minimum annual salary of $47,476 (Minimum Salary Threshold);
  2. employees cannot qualify for the highly compensated exemption unless they are paid at least a minimum annual salary of $134,004 (Highly Compensated Threshold);
  3. the Minimum Salary Threshold and the Highly Compensated Threshold will be adjusted every three years;
  4. nondiscretionary bonuses and commissions are included in the calculation of the exempt salary threshold (up to 10% of the required salary threshold), but only if employers pay those bonuses and commissions on a quarterly or more frequent basis; and
  5. the duties tests from the prior regulations remain unchanged.

Published on LinkedIn, May 18, 2016.

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C. Clayton (“Clay”) Gill is a business and employment lawyer at Moffatt Thomas, and acts as outside general counsel for many small and medium sized companies.  Mr. Gill is a member of the Moffatt Thomas Board of Directors.  He can be reached at ccg@moffatt.com or (208) 345-2000.  More information on the firm is available at www.moffatt.com.