Department of Labor Announces Final Rule on Overtime Exemption under FLSA

May 18, 2016

The Department of Labor (DOL) today released its Final Rule on Overtime Exemption under the Fair Labor Standards Act (FLSA), Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer EmployeesThe rule is a revision of the regulations governing which executive, administrative, and professional employees (white collar workers) are entitled to the FLSA’s minimum wage and overtime pay protections. The current salary threshold for exemption is $455 per week ($23,660 per year). Today's Final Rule sets the new salary threshold at $913 per week ($47,476 per year). The effective date is December 1, 2016. The DOL estimates that this will result in approximately 4.2 million currently exempt workers, who earn at least the current weekly salary level of $455 but less than the new salary level of $913, to become eligible for overtime. As such, the rule requires employers nationwide to reclassify many of their white collar employees.

Understanding the implications of the regulations is critical for employers and legal advisors to navigate the complex reclassification decisions they now face. This guide illustrates the key factors employers should consider when responding to changes:

Edgeworth Economics has published extensively and spoken widely on this topic, rigorously examining the rule and its impact on employers and providing solutions for firms as they respond to the Final Rule.

Upcoming Events 

  • Retail & Hospitality Executive Summit 
    Hosted by Kronos, provider of workforce management solutions  |  Wednesday, May 25, 2016
    Dr. Nathan Woods and Mr. Chuck Fields have been invited to present on key considerations for employers in deciding whether to increase salaries or reclassify affected workers as non-exempt, following the Department Labor's Final Rule on Overtime Exemption under FLSA.

  • 32nd Annual Bankruptcy and Restructuring Conference
    Hosted by: Association of Insolvency and Restructuring Advisors | Friday, June 10, 2016
    Dr. Stephen Bronars will discuss the Final Rule on Overtime Exemption under FLSA during a panel session on wage and wage-related issues that can impact the viability of a business and impede a successful Plan of Reorganization.  
  • The 27th National Forum on Wage & Hour Claims and Class Actions 
    Hosted by the American Conference Institute (ACI)  |  Thursday, June 2–Friday, June 3, 2016
    Dr. Deborah Foster will participate on the panel, "The Latest on the New White Collar Exemption Overtime Regulations: Analyzing the Practical Implications of the New Rules, Strategies for Minimizing Litigation Risks, and Defending Against Claims of Violation Once Litigation is Brought." 
  • Wage & Hour Class Actions: Hot Buttons to Watch for in 2016 
    Hosted by: The Knowledge Group  |  Thursday, June 23, 2016, 12–2 pm
    In this two hour live webcast, Dr. Deborah Foster will join a panel of experts discussing the most important wage and hour issues today. Dr. Foster will present on the FLSA White Collar Exemption Final Rule.

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