The United States Department of Labor has announced a new rule that it
claims will extend overtime protections to an estimated 4.2 million workers
who currently are exempt. The effective date of the new rule is December 1, 2016.
The Fair Labor Standards Act (FLSA) currently requires that most employees
in the U.S. be paid at least a minimum wage and overtime pay at time and
one-half the regular rate of pay for all hours worked over 40 in a work
week. However, the FLSA provides an exemption from both minimum wage and
overtime pay for individuals employed as executive, administrative, professional,
outside sales and computer employees. Moreover, some occupations are not
eligible for overtime pay (including teachers, doctors and lawyers).
Generally speaking, to qualify for the exemption under the FLSA, employees
were required to meet certain tests regarding their job duties and be
paid on a salary basis at not less than $455 per week. The new rule increases
the salary level required for the exemption from $455 a week ($23,660
annually) to $913 a week ($47,476 annually). The increase is of particular
significance in New York State, since the standard weekly salary level
required for the overtime exemption in New York is currently $675 a week.
In addition, the new rule increases the threshold salary level for highly-compensated
workers. Such workers were exempt from overtime pay if their annual compensation
was $100,000 and they performed certain duties. The new threshold is $134,000 per year.
Future updates to all of these thresholds will occur every three years,
beginning on January 1, 2020.
Partner Andrew A. Kimler, Esq. practices in the firm’s Commercial
Litigation and Employment Law Practice Groups. He can be reached at firstname.lastname@example.org
or 516.437.4385, ext. 122.