It’s Official: Overtime Exemption Threshold to Be $47,476 a Year

The Department of Labor (DOL) today will unveil its new overtime rule, setting an annual salary of $47,476 as the minimum compensation for an employee to be exempt from overtime pay. The current standard is $23,660.

Vice-President Joe Biden, who will be touting the new rule at a stop in Columbus, Ohio, today, said: “The middle class is getting clobbered. If you work overtime, you should actually get paid for working overtime.”

According to the DOL website, the new rule will:

  • Raise the salary threshold indicating eligibility from $455/week to $913 ($47,476 per year), ensuring protections to 4.2 million workers.
  • Automatically update the salary threshold every three years, based on wage growth over time, increasing predictability.
  • Strengthen overtime protections for salaried workers already entitled to overtime.
  • Provide greater clarity for workers and employers.

In today’s Final Rule, the DOL explains the steps to being declared exempt from overtime:

Since 1940, the implementing regulations have generally required each of three tests to be met for the exemptions to apply: (1) the employee must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed (the ‘salary basis test’); (2) the amount of salary paid must meet a minimum specified amount (the ‘salary level test’); and (3) the employee’s job duties must primarily involve executive, administrative, or professional duties as defined by the regulations (the ‘duties test’).

Employers will have until Dec. 1 to implement the new standard.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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  • Candy says:

    I am not sure I understand. Does that mean salaried people who do not receive any overtime compensation MUST get at least $47,476/year = $22.83/hour (breakdown). And when is this effective?

 

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