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Will the Way You Determine Overtime Be Legal on Dec. 1?

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The U.S. Department of Labor has updated regulations of the Fair Labor Standards Act. How will the new regulations affect overtime in your business?

The U.S. Wage & Hour Division of the Department of Labor (DOL) recently presented a webinar addressing concerns about the final overtime rules. Appropriately titled “Preparing for the Overtime Final Rule,” the webinar was presented in partnership with the Small Business Administration's Office of Advocacy.

Representatives from the Wage & Hour Division not only covered the basics of the final rule, but also highlighted resources and guidance available for employers. They even answered compliance assistance questions.

The new rules will go into effect on Dec. 1, 2016.

If you missed the one-hour presentation -- the fourth in a series -- don’t worry: an archived recording of the webinar will be available soon. Check out the DOL website for more information and archives for the other three webinars on the Overtime Final Rule.

In addition, the DOL is exploring scheduling additional webinars about the Overtime Final Rule.

In summary, the overtime regulations will automatically extend overtime pay protections to more than 4 million workers within the first year of implementation.

The DOL says the final rule focuses on "updating the salary and compensation levels needed for executive, administrative and pProfessional workers to be exempt." Specifically, the final rule:

1. sets the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South ($913 per week, $47,476 annually for a full-year worker);

2. sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test to the annual equivalent of the 90th percentile of full-time salaried workers nationally ($134,004); and

3. establishes a mechanism for automatically updating the salary and compensation levels every three years to maintain the levels at the above percentiles and to ensure that they continue to provide useful and effective tests for exemption.

Additionally, the Overtime Final Rule amends the salary basis test to allow employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10% of the new standard salary level.

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