The Current State of Overtime Exemption
The FLSA guarantees a minimum wage and overtime pay at a rate of not less than one and one-half times the employee’s regular rate for hours worked over 40 in a workweek. Under the current regulations, employees with pre-determined and fixed salaries above a threshold of $455 per week or $23,660 annually and who perform certain job duties are exempt from overtime pay requirements.
Who will be eligible for Overtime on 12/1?
The key provisions of this final rule include increasing the exempt level by setting it at the 40th percentile of earnings of full-time salaried employees ($913 per week or $47,476 annually) and the total annual compensation requirement for highly compensated employees from $100,000 in total annual compensation to the 90th percentile of earnings of full-time salaried workers nationally ($134,004 annually). Automatic updating is also a key provision which includes a mechanism to automatically update the standard salary level requirement every three years as a way of providing an effective means of distinguishing between overtime-eligible white collar employees and those who may be valid executive, administrative, professional employees.