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Big Changes to the Fair Labor Standards Act (FLSA) Overtime Rule

On May 18, 2016, the U.S. Department of Labor (DOL) published substantial changes to the overtime rule in the Fair Labor Standards Act (FLSA). It will make approximately 4.2 million currently exempt employees eligible for overtime pay later this year. There are 392,000 employees in California alone who are now expected to be eligible for overtime pay under the new rule changes.

In a nutshell, workers who earn less than $47,476 per year will have to be paid overtime, even if they’re classified as an exempt manager or professional. At this time, there will be no change to the duties test used to determine whether employees earning more than the salary threshold are exempt or nonexempt

The DOL will increase the salary threshold every three years in order to maintain it at the 40th percentile of full-time salaried workers in the lowest-wage Census region.

All employers will have to comply with the changes to the FLSA by December 1, 2016.

By: Ashley Ann Dorris and Jessica Farley