DOL Final Rule on Overtime Exemptions

The Department of Labor (DOL) is releasing its final rule today – doubling the salary level used to determine whether employees are classified as exempt from overtime under the Fair Labor Standards Act.

Starting on Dec. 1, the new salary level for exemptions will grow from $23,660 to $47,476, or $913 per week.

The final rule sets the salary threshold at the 40th percentile of earnings of full-time salaried workers in the lowest-wage region identified by the U.S. Census Bureau–currently the South.

The Department published a Notice of Proposed Rulemaking (NPRM) in the Federal Register on July 6, 2015 (80 FR 38515) and invited interested parties to submit written comments on the proposed rule at by September 4, 2015.

The Department received over 270,000 comments in response to the NPRM from a variety of interested stakeholders. The feedback the Department received helped shape the Final Rule.

Additionally, the Final Rule amends the salary basis test to allow employers to use non-discretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.

President Obama says the rule is “is expected to boost wages for workers by $12 billion over the next 10 years” for “4.2 million” American workers — about 2% of the workforce.