MRR Article: Department of Labor Issues Final Overtime Rule

By: Tami Z. Hannon, Esq.
Mazanec, Raskin & Ryder Co., LPA

The Department of Labor (DOL) has issued its final rule adjusting the salary requirements for employees to be exempt from overtime.  The DOL is not making any changes at this time to the other part of the exemption test – the duties the employee must perform to qualify for an overtime exemption.

Under the final rule,

  • An employee must make $913 weekly, or $47,476 annually to qualify for an exemption;
  • An employee must make $134,004 annually to qualify for an exemption as a highly compensated employee;
  • These levels will be updated every three years to align with the 40th percentile of weekly earnings of full-time salaried workers in the lowest-wage Census Region. The threshold for highly compensated employees will be adjusted to the 90th percentile of annual earnings of full-time salaried workers nationally.  The first update will occur on January 1, 2020.

The rule will also now permit employers to use nondiscretionary bonuses, incentive pay, and commissions to contribute towards a maximum of 10% of required salary levels for non-highly compensated employees.  This additional pay must be paid at least quarterly to be counted towards the salary requirements.

The final rule becomes effective December 1, 2016.

For more information or if you have any questions, please contact:

Tami Z. Hannon  – MRR Cleveland
Phone: 440.424.0009
Fax: 440.248.8861