New Department of Labor Rule Changes Overtime Exemption Requirements

October 19th, 2016

The U.S. Department of Labor (DOL) issued a final rule increasing the salary threshold for overtime exemptions. The rule, which goes into effect December 1, will affect healthcare workers employed by the federal government, such those as in Veterans Administration hospitals.

The minimum annual salary requirement for overtime exemption will increase to $47,476 from the current $23,660. Hourly workers, non-managers, and lower wage earners will have to be paid 1.5 times the hourly wage if they work more than 40 hours a week – a level that will be adjusted every three years. Employers can give non-discretionary bonuses and commissions up to 10% of the salary level. The new rule does not change overtime exemptions for executive, administrative, and professional employees, according to the DOL fact sheet.

To prevent potentially costly wage claims, employers must ensure that all managers and human resources personnel are properly trained to ensure nonexempt employees are following proper timekeeping procedures. The DOL plans to issue three technical guidance documents to educate employers and staff.