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The new overtime rules issued by the U.S. Department of Labor will raise the salary level for several overtime exemptions under the Fair Labor Standards Act.  The FLSA currently requires covered employers to pay minimum wage ($7.25) and overtime (time and a half on more than 40 hours worked in a workweek) to employees, unless they are exempt. The exemptions are limited. For Executive, Administrative and Professional workers to be exempt, they must be paid a salary of $23,660 annually or $455/week.  

** The new rules change the salary level to $913 per week or $47,476 annually for a full-year worker.  Employers may use bonuses and incentive payments, including commissions, as long as they are nondiscretionary, to satisfy up to 10 percent of the new salary level. Another major change – for Highly Compensated Employees to be exempt, the total annual compensation requirement will increase from $100,000 to $134,004.  

What is a covered employer under the FLSA? Click here.

Want to learn more about the Executive, Administrative, Professional worker and Highly Compensated Employee exemptions? Click here.

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