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New Federal Overtime Rule Takes Effect December 1st

UPDATE: A federal judge in Texas has blocked the expansion of overtime rules described above which were to take effect on December 1 so they will not take effect as expected. We’ll update you on this as the lawsuit proceeds.

The federal Fair Labor Standards Act (FLSA) requires that employers pay eligible non-exempt employees an overtime premium of at least 1.5 times their regular rate of pay for hours worked over 40 in a workweek. On May 18, 2016 the US Department of Labor announced that a revised overtime rule will double the weekly salary threshold from $455 to $913 for the executive, administrative and professional white-collar exemptions from the overtime provision under the FSLA. This means that all non-exempt employees, including those on salary earning less than the new $913 weekly threshold, must be paid at least 1.5 times their regular rate of pay for any hours worked in excess of 40 hours per week. The regular rate of pay is determined by dividing the employee’s total compensation for the week by the total number of worked in that week. Overtime pay cannot be waived by the employee. Tips are not included in the calculation (more on this next month as we help you prepare for the increase in New York State’s minimum wage which takes effect December 31st).