September 14, 2016 | By NACE Staff
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In May, the White House announced the final rule for overtime pay in the Fair Labor Standards Act that would increase the exempt salary threshold to $47,476, more than double the current threshold of $23,660.
The rule is scheduled to go into effect December 1, 2016.
Under the final rule, employers will have to pay workers earning less than $47,476 a year overtime, even if these employees are classified as managers or professionals. The final rule will also automatically update the salary threshold every three years, based on wage growth over time.
However, there are challenges to the rule as it stands. A group of U.S. Congressmen—Kurt Schrader (D-Oregon), Jim Cooper (D-Tennessee), Henry Cuellar (D-Texas), and Collin Peterson (D-Minnesota)—has introduced legislation that would spread out the phase-in of the new threshold increase over three years. The first increase would still take place on December 1, but it would only up the threshold by 50 percent to $35,984.
NACE will continue monitoring and reporting developments of the final rule for overtime pay in the Fair Labor Standards Act. For current information, see the resources provided by the DOL Wage and Hour Division.