Christine Coleman

Christine S. Coleman Associate

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FINALIZATION OF DEPARTMENT OF LABOR’S PROPOSED RULE EXPANDING OVERTIME ELIGIBILITY DELAYED.

We have been warning our readers about the new rule proposed by the Department of Labor that would approximately double the minimum salary that employers would have to pay exempt employees. While the rule was expected to be finalized this year and go into effect in the first quarter of 2016, delays have pushed the anticipated effectual date back as far as mid-2016 to early 2017.

The proposed rule garnered a large amount of public commentary, likely due to the dramatic, sudden, and in many cases impossible increase in payroll employers were facing. While there is no indication at this time that the particulars of the rule will be scaled back when and if it is finalized, employers around the country are thankful for the delay.

Should the rule be finalized as it is, the DOL will set the standard salary level at the 40th percentile of weekly earnings for full-time salaried workers, which at this time would be approximately $921 per week or $47,892 annually. Additionally, the total annual compensation requirement for highly compensated workers will increase from $100,000 to $122,148 (or the 90th percentile of weekly earnings for full time salaried workers). Moving ahead, the DOL would automatically update the salary and compensation levels yearly – hopefully avoiding such catastrophic increases in the future.

While the delay in the effectual date for the proposed rule is welcome news for many employers, it is important to use the delay to your advantage by preparing for its likely publication.  Review your options by reading our article entitled: Can’t Double Your Employees’ Salaries Next Quarter? Here Is Plan B, and consult an experienced employment law attorney to make sure your particular business will remain in compliance with DOL rules and other ever-changing local, state and federal laws.

The St. Louis employment attorneys at McMahon Berger have been representing employers across the country in labor and employment matters for sixty years, and are available to discuss these issues and others.  As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation as every situation must be evaluated on its own facts. The choice of a lawyer is an important decision and should not be based solely on advertisements.

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