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U.S. DOL Changes Overtime Regulations

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On May 18, 2016, the U.S. Department of Labor (“DOL”) issued its
final rules changing the current overtime pay regulations. Effective December
1, 2016, the new DOL rule updates the minimum salary level that Executive,
Administrative and Professional employees must be paid to be exempt from the
time and one-half overtime pay requirement.

Specifically, to remain exempt from the overtime requirements,
an employee must continue to meet the exempt duties test and must also receive
total annual compensation of at least $913 per week; $47,476 annually. This is
an increase that more than doubles the current annual compensation threshold of
$23,660. The new regulations include a provision pursuant to which up to 10% of
the new compensation level can be satisfied with non-discretionary bonus and
incentive payments paid at least quarterly. Also, the new annual compensation
level for highly compensated individuals who must meet the current minimal
duties test increases from $100,000 to $134,004. Additionally, the salary
levels set forth in the new regulations will be updated every three years by
the Department of Labor.

The above information is a brief summary of the new overtime
rule changes. There are, of course, a number of options an employer can
implement in response to the new regulations. For more information about the
new regulations, please call David Knowles or contact him at drknowles

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