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New Overtime Pay Rule May Not Arrive Until Late 2016


A Final Rule that could impact millions of American workers’ eligibility for overtime pay may be released by the US Department of Labor as early as spring 2016.

The rule, as proposed, would raise the weekly salary threshold for executive, administrative, and professional white-collar workers to qualify for exempt status under the Fair Labor Standards Act from $455 ($23,660 annually) to more than double the amount: $970 ($50,400 annually). The rule could potentially expand the number of employees eligible for overtime protections from about 8 percent of the salaried workforce today to 40 percent. Certain types of businesses that tend to have a significant number of managers who make more than $24,000 a year but less than $50,000 a year—such as restaurants, daycare facilities and manufacturers—could be affected most by the rule.

The US DOL, Wage and Hour Division had previously indicated a release date of July 2016 per the Unified Agenda published at the end of 2015.  Since that time, Labor Secretary Perez has said that despite the overwhelming number of public comments on the proposal, close to 300,000—more than three times the number received the last time that overtime pay limits were raised in 2004, he expects the agency to release the final rule sooner.  Employers will likely have 30-60 days to comply with the final rule once it's published in the Federal Register.


This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.
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