Labor Department establishes final FLSA overtime rule

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Department of Labor recently established the final Fair Labor Standards Act (FLSA) rule, making 1.3 million workers eligible for overtime pay under the statute.

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The action updates the earnings thresholds necessary to exempt executive, administrative or professional employees from the FLSA’s minimum wage and overtime pay requirements while also enabling employers to count a portion of certain bonuses towards meeting the salary level.

“For the first time in over 15 years, America’s workers will have an update to overtime regulations that will put overtime pay into the pockets of more than a million working Americans,” Acting Secretary of Labor Patrick Pizzella said. “This rule brings a commonsense approach that offers consistency and certainty for employers as well as clarity and prosperity for American workers.”

The rule features, among other provisions, raising the standard salary level from the currently enforced scale of $455 to $684 per week; raising the total annual compensation level for highly compensated employees (HCE) from the currently-enforced level of $100,000 to $107,432 per year; and allowing employers to use nondiscretionary bonuses and incentive payments that are paid at least annually to satisfy up to 10 percent of the standard salary level, in recognition of evolving pay practices.

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