By: Associated Oregon Industries
On Wednesday, May 18, 2016, the Department of Labor (DOL) unveiled new rules for calculating overtime. Here’s how they work:
• The salary threshold will be increased to $47,476 annually ($913/week) – an increase of slightly more than 100 percent from the current threshold of $23,660 annually ($455/week). This threshold will be updated every three years and tied to the 40th percentile of full time salaried workers in the lowest wage region of the country (currently the Southeast). This is an improvement over the proposed rules, which would have updated the salary threshold annually.
• There will be no changes to the duties test. The DOL had indicated it was considering adding a quantification component that would have required employers to show an employee was performing exempt duties a certain percentage of time to qualify under the specific exemption, but ultimately made no changes.
• The final rule contains a provision allowing employers to count nondiscretionary bonuses, incentives, and commissions toward up to 10 percent of the required salary level for the standard exemption. However, employers will have to pay those amounts on a quarterly or more frequent basis.
• Employers will have until Dec. 1, 2016 to come into compliance with the new requirement – a period of about 200 days. The initial proposal from DOL did not include an implementation period, so the 200 days is a definite improvement.
Associated Oregon Industries opposed these new regulations from their first draft, submitting comments to DOL and signing on to letters of opposition with our national partners. The finalized rules will cause hundreds of thousands of career professionals to lose their status as salaried employees and find themselves reclassified as hourly workers, depriving them of the workplace flexibility and other benefits they value. And the one-size-fits-all approach means that businesses trying to make ends meet in Oregon’s small towns are now expected to pay the same salaries as those in New York City.