May 2016

THE DEPARTMENT OF LABOR ISSUED RULES UPDATING SALARY AND
COMPENSATION LEVELS FOR OVERTIME EXEMPT EMPLOYEES

The Department of Labor’s (DOL) “Final Rule” on overtime exemptions provides new compensation levels for employees who are to be classified as exempt under the Executive, Administrative and Professional exemptions under the Fair Labor Standards Act. The new rules go into effect on December 1, 2016.

Under the Final Rule, overtime exempt employees who perform exempt duties must conform to the following as of December 1, 2016:

1. They must be paid at least $913 per week or $47,476 annually and conform to FLSA requirements for their positions. The current minimum is $455 per week or $23,360 annually.
2. Highly compensated employees who perform one of the duties set out for Executive, Administrative or Professional employees must receive $134,004 annually. The current minimum for such employees is $100,000 annually.
3. The new minimum rates will be automatically updated every three years. The first update will be on January 1, 2020.
4. Nondiscretionary bonuses and incentive payments such as commissions that are paid at least quarterly may satisfy up to 10 percent of the new overtime exempt salary levels.
5. No changes have been made to any of the duties tests that are required for the exemptions to apply in addition to the salary requirements.

Click the following links to see the Department of Labor Fact Sheets delineating the requirements for Executive, Administrative and Professional exemptions.

If you have any questions, please do not hesitate to contact us.

Stoneman, Chandler & Miller LLP
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Boston, MA 02110
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617-556-8989 fax

The foregoing has been prepared for the general information of clients and friends of Stoneman, Chandler & Miller LLP. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your Stoneman, Chandler & Miller LLP representative. This material may be considered advertising under certain rules of professional conduct.

© 2016 Stoneman, Chandler & Miller LLP