The Department of Labor has published a Final Rule to the Fair Labor Standards Act on overtime pay protections for EAP (executive, administrative, professional) employees.  The ruling changes the “exemptions to overtime pay” threshold on these salaried employees.

The new rules go into effect December 1, 2016.  The revised amounts for those being paid Overtime jumps from anyone making $455 weekly ($23,660 annually) to those making $913 weekly ($47,476 annually).   To clarify, this means that anyone making LESS than $913 weekly will have to be paid overtime for any hours over 40 per week.

 The DOL also made sure to add a stipulation that the threshold amounts will be tied to the poverty line and increase accordingly.

Employers will need to review how their workforce is being utilized and determine the best way to comply with the new ruling.  Some options are to boost lower salaries to the new “exemption” threshold base of $913 weekly, to begin tracking hours in order to limit overtime, or to reduce the base salary if there is consistent overtime to ensure the wage stays about the same as it is currently.

The employers who may be affected negatively by this ruling include small, rural companies where the lower threshold amount is a sufficient income level, employers who have few locations and a small staff who only occasionally have overtime work weeks, and companies with a high number of seasonal and hourly employees.

 If you would like more information on the revised EAP employee salary ruling, please contact our office.