The Fair Labor Standards Act established minimum wage, overtime pay eligibility,
child labor standards and recordkeeping regulations. It set rules for
workers in the private sector, federal, state and local governments so
they could be paid fair wages for their overtime work. In 2014, President
Obama directed the Secretary of Labor to update the overtime regulations
with the argument that they no longer reflected the intent of the Fair
Labor Standards Act.
On May 16th 2016, President Obama and Secretary Perez announced the final ruling on
updating the overtime regulations. The new regulations are set to put
protections in place for other 4 million working Americans within the
first year. Today many white-collar professional workers work several
hours more than a 40-hour workweek without seeing a single cent of overtime
due to outdated overtime regulations. The new regulations would increase
the overtime-exempt salary threshold from $455 a week to $913 or $47,476
a year. The rule also requires the Department of Labor to update the salary
threshold every three years based on wage growth overtime.
Increasing the threshold gives employers the following options:
- Pay time and a half for overtime work
- Raise employees’ salaries above the new threshold
- Require employees to limit their workweeks to 40 hours a week.
- Create a combination of all the above options
In addition to increasing the salary for overtime exemption, the final
ruling also sets the total compensation for high earning employees to
the annual equivalent of the 90th percentile for annual salaried workers. This ruling goes into effect on
December 1st 2016, which gives employers six months to comply with regulations.
If you feel your overtime rights are being violated after this ruling goes
into effect, you should
contact the legal team at Marder Employment Law. OurHollister employment law attorneys can help you get the compensation you deserve for your hard work.