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PLNA e-News: Protecting Values In the Nation

Are You Ready for the New Federal Overtime Rule?

Monday, November 14, 2016   (0 Comments)
Posted by: Gregg Robertson
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Dept. of laborWASHINGTON, D.C. – On December 1, 2016, the new federal overtime rule goes into effect. The new rule doubles the salary at which employees can be exempted from overtime. The salary exemption rises from $455 a week ($23,660 annually) to $913 per week ($47,476 annually).

To help businesses comply with the new rule, the Department of Labor Wage & Hour Division (DOL) in partnership with the Small Business Office of Advocacy presented a webinar entitled, “Preparing for the Overtime Final Rule.” DOL provided a briefing and a Questions & Answers session regarding the agency’s final rule that makes changes to the Fair Labor Standards Act (FLSA) overtime regulations. This Final Rule is effective on December 1, 2016.

A recording of the webinar is now available at: https://www.dol.gov/WHD/overtime/final2016/webinars.htm. Or on YouTube: https://www.youtube.com/watch?v=Dn0Eo09nA0M. DOL has also posted a transcript of the Questions & Answers portion of the webinar.

Here are some of the FAQs that may be applicable to your business.
Q. We are a seasonal property open 8 months - is the $47,476 based on that or 12 months?
A. The new salary is $913 per week. During the eight-month period that employees work at your property, you will need to guarantee that at least $913 per week is paid for an exempt employee. Please see FOH 22g10 concerning rules for annual salary earned in a shorter period, which can be found at the following link: https://www.dol.gov/whd/FOH/FOH_Ch22.pdf.


Q. How does this ruling affect agricultural workers?
A. The Department's rulemaking addressed the regulations governing the "white collar" exemptions under Section 13(a)(1) of the FLSA - exemptions for executive, administrative, and professional employees, as well as outside sales employees and employees with certain computer-related job duties. Thus, unless an agricultural worker currently qualifies for one of these "white collar" exemptions, they will not be directly affected by the Department's Final Rule. The FLSA's exemptions governing agricultural workers have not been changed by this Final Rule.


Q. What is the salary requirement for part time salary workers?
A. Whether a worker is full-time or part-time, the standard salary level to qualify for exemption will be $913 per week.


Q. I know it is not changing but can you provide a simple definition as to what the duties test is? Is the duties test what defines whether an employee is exempt under executive/admin/professional?
A. WHD Fact Sheet #17A provides a concise overview of the applicable duties tests for all of the Section 13(a)(1) exemptions. That fact sheet is available at: https://www.dol.gov/whd/overtime/fs17a_overview.pdf.


Q. Are self-employed individuals who are >2% shareholder employers subject to the minimum salary requirements? Many times we see owners (who consistently work >40 hours/week) with annual salaries less than the threshold. Will they have to increase their salaries, or would they be exempt as owners?
A. Business owners - defined in 29 CFR 541.101 as "any employee who owns at least a bona fide 20 percent equity interest in the enterprise in which the employee is employed, regardless of whether the business is a corporate or other type of organization, and who is actively engaged in its management" - are not subject to the salary level requirement. These bona fide business owners would not be affected by the Final Rule's increase to the standard salary level.


For more Q&A transcripts click here: https://www.dol.gov/WHD/overtime/final2016/webinarfaq.htm

DOL has created other resources to help small entities comply with this rule, such as a Small Business Compliance Guide, which can be found at: https://www.dol.gov/WHD/overtime/final2016/. DOL also has a hotline for compliance questions at: 1-866-4-USWAGE (1-866-487-9243).

Please call (717.238.2033 direct) or email Gregg Robertson at PLNA if you have any questions on the new rule.


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