Today, President Obama and Secretary Perez announced the publication of the final rule regarding overtime regulations which will give a huge boost to the wallets of over 4 million workers in the first year alone. The final rule is set to go into effect on December 1, 2016.
The focus of the final rule is to update the salary levels needed for Executive, Administrative, and Professional workers to be exempt. Here are the provisions of this ruling:
- Sets the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South ($913 per week; $47,476 annually for a full-year worker);
- Sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test to the annual equivalent of the 90th percentile of full-time salaried workers nationally ($134,004); and
- Establishes a mechanism for automatically updating the salary and compensation levels every three years to maintain the levels at the above percentiles and to ensure that they continue to provide useful and effective tests for exemption.