Revised Overtime Laws for White Collar Workers Effective December 1.
Are you aware that the new white collar overtime laws put forth by the U.S. Department of Labor will go into effect on December first of this year? While many employers know about these new laws, some may not know the details and the effect they will have on their businesses. We have provided the highlights below, but don’t worry. If you need help with compliance, Galactic Inc. can help!
Quick Summary of Revised Laws
- White collar overtime laws have only been updated once since the 1970s.
- The outdated salary threshold applies to 7% of full-time salaried workers today compared to 62% in 1975.
- The new rule will raise the salary thresholds for the first time since 2004 and become effective On December 1, 2016.
- For Standard Salary Level: The rule will raise the standard salary threshold to equal the 40th percentile of weekly earnings for full-time salaried workers in the lowest wage Census region (currently the South) – from $455 a week to $913 a week or $47,476 for a full-year worker.
- This raise will entitle 35% for full-time salaried workers to overtime based on their salary
- For Highly Compensated Employees (HCE) Salary Level: The rule updates the total annual compensation level above which most white collar workers will be ineligible for overtime. The rule raises this level to the 90th percentile of full-time salaried workers nationally or from $100,000 to $134,000 per year.
- The rule will update automatically every three years beginning in 2020 and will raise the standard threshold to the 40th percentile of full-time salaried workers in the lowest-wage Census region. The HCE threshold will increase to the 90th percentile of full-time salaried workers nationally.
- The rule will allow up to 10% of the salary threshold for non-HCE employees to be met by non-discretionary bonuses, incentive pay or commissions provided these are paid on at least a quarterly basis.
Please click here for US Department of Labor Summary. Click here for State-by-State breakdown.
Galactic Inc. Understands Your Burden
Galactic understands how difficult it can be to grow your business while trying to run your business. Keeping up with and implementing ever changing laws, compliance requirements and policies can be daunting, even for the most experienced business owner. We make sure to keep on top of the laws and regulations for you and ensure that you are in compliance so that you are free to do your business without worrying about these kinds of changes.
If you have questions or need help understanding the new overtime laws or other compliance issues, please give us a call at 205-322-2220.