Jolanta A. Zinevich, L.L.C.
Attorney at Law
The Fair Labor Standards Act (FLSA) guarantees a minimum wage for workers as well as sets the rules as to overtime pay.
Although most workers are covered by FLSA there are a number of exceptions, including executive, administrative, professional, outside sales, and computer employees. To be considered exempt one must meet certain criteria.
On May 18, 2016, President Obama and Secretary Perez announced the publication of the Department of Labor’s final rule updating the overtime regulations. Such will automatically extend overtime pay protections to over 4 million workers within the first year of its implementation. The New Final Rule goes into effect on December 1, 2016
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, which is $913 per week or $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, which is $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 nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level. The Final Rule makes no changes to the duties tests.
The Final Rule is not changing any of the existing job duty requirements to qualify for exemption.
To view the new Rule go to https://www.gpo.gov/fdsys/pkg/FR-2016-05-23/pdf/2016-11754.pdf
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Fair Labor Standards Act (FLSA)
The FLSA establishes minimum wage, overtime pay, record keeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments.
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