On May 18, 2016, the U.S. Department of Labor (DOL) announced a final rule regarding overtime wage payment qualifications for the “white collar exemptions” under the Fair Labor Standards Act (FLSA). The final rule increases the salary an employee must be paid in order to qualify for a white collar exemption. The required salary level is increased to $47,476 per year and will be automatically updated every three years. The final rule does not modify the duties test employees must meet to qualify for a white collar exemption.
Employers will need to comply with this rule by Dec. 1, 2016.
- Employers must become familiar with the new rule and identify which employees will be affected. Employers should reclassify employees as exempt or non-exempt, as necessary, by Dec. 1, 2016.
- Employers should also consider communicating any work schedule changes to affected employees before the date mentioned above.
- Finally, employers should evaluate whether implementing new timekeeping practices and training for managers and supervisors on the new requirements is necessary.
Enforcement and Compliance
Employers that fail to comply with the final rule may be subject to a variety of overtime wage payment enforcement mechanisms, including the ones listed below.
- Private employee lawsuits: These lawsuits can be initiated by employees either individually or through collective action to recover back pay, interest, attorneys’ fees and court costs.
- Administrative injunctions: These injunctions may include a prohibition on the shipment of goods in interstate commerce if the goods were produced in violation of the FLSA (including overtime wage payment provisions).
- Civil fines for willful and repeated violations (up to $1,100 per violation).
- Criminal charges for willful violations (up to $10,000 in fines, imprisonment for up to six months or both).
This series of slides presents an overview of the overtime rules that are set to become effective on December 1st, 2016. Employers can use this presentation to educate their employees on the upcoming changes. Please contact Conservation United for more information on the FLSA and other wage and hour laws.