Monday, 20 June 2016

New FLSA Overtime Rules in 2016

Whether or not you are entitled to overtime payments under the Fair Labor Standards Act (FLSA) depends on several factors. For salaried employees, overtime eligibility is determined by two main factors: your job duties and the amount of your salary. The current salary threshold for overtime is set at $455 per week, which equals $23,660 per year. Anyone who makes less than that amount is automatically entitled to time-and-a-half overtime rates for any hours worked over 40 in a week. Anyone who makes more than that amount may not qualify for overtime based on other factors, such as job title or duties.

The Obama Administration has long been focused on ensuring that overtime laws are fair for salaried workers in the U.S. Specifically, the Administration believed that the salary threshold was too low to adequately ensure that all employees who deserved overtime pay were protected. In fact, the large majority of salaried employees in the U.S. earn more than 23,660, so the threshold meant very little. To expand protections for salaried employees, the White House and the Department of Labor (DOL) recently announced some major upcoming changes to the FLSA overtime rules that will affect millions of employees across the U.S.

New Overtime Threshold

The changes will increase the FLSA overtime threshold to $913 per week, or $47,476 per year, which is more than double the existing threshold. This means that no one who earns less than that amount can be denied overtime payments based on their job duties or title. This new overtime threshold means that an estimated 4.2 million employees who were previously ineligible for overtime will now have rights to overtime payments under the law.

In addition, the DOL will update the threshold every three years to ensure that the designated salary level makes sense based on national earning percentiles.

New Rules for Highly Compensated Employees

If you make above the overtime threshold and are not exempt from overtime based on your job duties, you can still be excluded if you reach a certain income level. This exemption refers to such employees as “highly compensated employees” and that maximum income is currently set at $100,000 per year. The new FLSA rules will increase this maximum to $134,004, which will entitle even more employees to overtime payments.

What this Means for You

These new changes to FLSA go into effect on December 1, 2016. Every employer should be preparing to implement any necessary changes to the way they track hours worked and their payroll rates to ensure their employees are properly compensated. Employees should be aware of whether the new overtime rules apply to them so they can recognize whether their employer may be committing an overtime violation.

If you have any questions about the upcoming FLSA overtime changes or would like to discuss a potential overtime violation, do not hesitate to consult with experienced Florida overtime attorney Jonathan Allen. We protect the rights of employees when it comes to overtime payments, so please call J. Allen Law P.L. at 407-205-2330 today for a free consultation.

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