The Wagner Law Group
Wagner Law Group, A Professional Corporation, is a nationally
recognized ERISA & employee benefits, estate planning,
employment, labor & human resources practice.
in 1996, The Wagner Law Group has 22 attorneys engaged
exclusively in employee benefits, estate planning and
employment law. Six of our attorneys are AV rated by
Martindale-Hubbell as having very high to preeminent legal abilities
and ethical standards. The firm is among the largest ERISA boutiques
in the country. Our practice is national in scope, with clients in
more than 40 states and several foreign countries.
Wagner Law Group
Fax: (561) 293-3591
7108 Fairway Drive
Palm Beach Gardens, FL 33418
East Kennedy Boulevard
Tampa, FL 33602
Francisco, CA 94104
100 South 4th Street, Suite 550
St. Louis, MO 63102
May 24, 2016
Employment Law Alert
DOL Issues New FLSA Overtime
has released final regulations that update the Fair Labor Standards
Act's ("FLSA's") overtime pay requirements. In particular,
the final regulations, which are slated to take effect on December 1,
2016, focus primarily on updating the salary and compensation levels
needed for executive, administrative and professional workers to be
exempt from the FLSA's overtime pay requirements.
Background. In general, employees covered by the FLSA must
receive overtime pay for hours worked over 40 in a workweek at a rate
not less than time and one-half their regular rates of pay. However,
FLSA provides that salaried employees who currently make more than $23,660
per year (i.e., the FLSA salary level threshold) and whose job
duties primarily involve executive, administrative, or professional
duties are exempt from the overtime pay requirements. Highly
compensated employees ("HCEs") whose salary exceeds a certain
threshold and who pass a minimal duties test may also qualify for the
FLSA's overtime pay exemption.
from the final regulations are as follows:
the FLSA salary level threshold.
The final regulations increase the FLS salary level threshold from
$23,660 to $47,476 per year, or $913.00, weekly. It is estimated that
an additional 4 million workers will become eligible for overtime pay
as a result of the increase.
the HCE salary level threshold.
The final regulations increase the total annual compensation
requirement for the FLSA's HCE exemption to apply from $100,000 to
$134,004. HCEs must continue to receive at least the same weekly
salary rate (which is now $913) as other exempt workers, as well as meet
the less stringent duties test.
salary thresholds now indexed.
The final regulations establish a mechanism for automatically
updating the salary and compensation levels every three years to
ensure that they provide useful and effective tests for exemption.
duties tests remain intact. The
final regulations do not revise the FLSA's duties tests for
executive, administrative and professional, computer or outside sales
bonus and incentive payments.
The final regulations authorize employers to use nondiscretionary
bonuses and incentive payments (including commissions) to satisfy up
to 10 percent of the salary level test. To credit such payments
towards the salary threshold test, the payments must be made no less
frequently than quarterly.
employee does not earn enough in bonuses in a quarter to retain
exempt status, the final regulations permit employers to make a
"catch-up" payment at the end of the quarter. The employer
has one quarter in which to make up for the shortfall, and such
payment will only count towards the prior quarter's salary amount.
Where an employer decides not to make a catch-up payment, the
employee would be entitled to receive overtime pay for any overtime
hours worked during that quarter.
for Employers. It is
critically important for employers to understand the FLSA overtime
pay exemptions and its impact on their budget, as there can be
serious financial consequences for employers who violate the FLSA's
overtime pay requirements. For assistance with meeting the FLSA's
overtime pay requirements or representation concerning a DOL Wage and
Hour audit, please contact one of The Wagner Law Group's employment