Advocacy Update: Federal Overtime Rule

The Obama Administration announced its final ruling for overtime regulations on May 18, 2016. With this new ruling, Buffalo Niagara employers must prepare for changes in how they compensate their employees.

WHAT ARE THE CHANGES?

  • Salary threshold. The final rule will raise the salary level for overtime eligibility. The increase will go into effect on December 1, 2016.
  • Standard salary level. The final rule will raise the standard salary threshold for overtime eligibility for most salaried white collar workers to $47,476/year ($913/week).
  • Highly Compensated Employees (HCE) salary level. The rule also updates the total annual compensation level above which white collar workers will be ineligible for overtime to $134,004/year.
  • Automatic updates. The rule will automatically update the salary threshold every three years, beginning January 1, 2020. The Department of Labor will post new salary levels 150 days in advance of their effective date, beginning August 1, 2019.
  • Bonuses, incentive payments, and commissions. The rule will allow up to 10% of the new salary threshold to be met by non-discretionary bonuses, incentive pay, or commissions, provided the payments are made on a minimum of a quarterly basis.

Find more information on the final rule here.

WHAT ARE THE IMPACTS?

  • Nationwide, 4.2 million salaried workers will be affected by the rule change. The Department of Labor estimates that 4.1 million workers will become eligible for overtime when they work more than 40 hours, while 100,000 will receive a raise so their salary is above the new threshold.

WHAT YOU CAN DO.

  • Sign a Petition. The US Chamber has started a petition effort for employers who are concerned about the economic impact of the rule. A link to the petition can be found here.
  • Contact your members of Congress. In an effort to stop the implementation of the overtime rule, lawmakers have introduced a bill in the House and Senate entitled, Protecting Workplace Advancement and Opportunity Act. More information on the bills can be found here: H.R. 4773 and S. 2707. Contact your members of Congress in support of this legislation. A sample e-mail can be found here.

Senator Kirsten Gillibrand
Senator Charles Schumer
Representative Chris Collins (NY-27)
Representative Brian Higgins (NY-26)
Representative Tom Reed (NY-23)