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Labor Department Finalizes New Overtime Compensation Rule

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Last week, the U.S. Department of Labor (DOL) released its long-awaited and contentious final rule to revamp overtime compensation regulations. Specifically, the final rule includes:
• Raising the salary threshold for overtime pay from $455/week or $23,660 to $913/week or rather $47,476 per year (which is less than the proposed $50,440 or $970/week);
• Increasing the highly-compensated employee threshold from $100,000 to $134,004;
• Updating the salary threshold every three years, starting in 2020 (will be tied to the 40th percentile of full-time salaried workers in the lowest income region of the country);
• Amending the salary basis test to allow employers to use nondiscretionary bonuses and incentive payments (commissions) to satisfy up to 10 percent of the new standard salary level;
• NOT changing the "duties test" for executive, administrative and professional employees (which was originally hinted at in the proposal); and
• Becoming effective on December 1, 2016 (allowing only 6 months for businesses to prepare). 

Click here and here for more information, factsheets, FAQs and upcoming DOL Webinars on the rule. Click here to view the 508-page final rule.

For more information, contact Kevin Walgenbach at

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