U.S. Department of Labor Expands Overtime Pay for Salaried "White Collar" Workers

Beginning December 2016, new rules will raise the salary threshold that employers must meet before they can deny overtime pay to certain workers from $23,660 to $47,476. Additionally, the new rules update the salary threshold every three years, based on wage growth over time, increasing predictability. As the department explained:

Each year that the salary level is not updated, its utility as a distinguishing mechanism between exempt and nonexempt workers declines. The Department has revised the levels just once in the 41 years since 1975. In contrast, in the 37 years between 1938 and 1975, salary test levels were increased approximately every five to nine years. See: Final Rule, pp. 214.

So what does this mean?

This means that as of December 1, 2016, if you were denied overtime because you fell under the supervisor/white-collar exemption, but your salary is below $47,476, your employer must raise your salary to the new salary threshold in order to continue enjoying this overtime exemption, or pay you time-and-a-half for each hour worked above 40 hours per week.

The DOL reminds us that the final rule does not make any changes to the duties test for executive, administrative and professional employees.

See: Final Rule