Wage & Hour Update: DOL Releases Its Final Rule Updating FLSA White-Collar Overtime Regulations

May 20, 2016 Azadian Law Group Wage & Hour Violations

President Bush Memo
On May 18, 2016, President Obama and Secretary Perez announced the publication of the Department of Labor’s final rule updating the overtime regulations, which will automatically extend overtime pay protections to over 4 million workers within the first year of implementation. This long-awaited update will result in a meaningful boost to many workers’ wallets, and will go a long way toward realizing President Obama’s commitment to ensuring every worker is compensated fairly for their hard work.

In 2014, President Obama signed a Presidential Memorandum directing the Department to update the regulations defining which white collar workers are protected by the FLSA’s minimum wage and overtime standards. Consistent with the President’s goal of ensuring workers are paid a fair day’s pay for a hard day’s work, the memorandum instructed the Department to look for ways to modernize and simplify the regulations while ensuring that the FLSA’s intended overtime protections are fully implemented.

The Department published a Notice of Proposed Rulemaking (NPRM) in the Federal Register on July 6, 2015 (80 FR 38515) and invited interested parties to submit written comments on the proposed rule at www.regulations.gov by September 4, 2015. The Department received over 270,000 comments in response to the NPRM from a variety of interested stakeholders. The feedback the Department received helped shape the Final Rule.

The Final Rule focuses primarily on updating the salary and compensation levels needed for Executive, Administrative and Professional workers to be exempt. Specifically, the Final Rule

Key Provisions of the Final Rule:

  1. 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);
  2. 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
  3. 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. Additionally, the Final Rule amends the salary basis test to allow employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.

The effective date of the final rule is December 1, 2016. The initial increases to the standard salary level (from $455 to $913 per week) and HCE total annual compensation requirement (from $100,000 to $134,004 per year) will be effective on that date. Future automatic updates to those thresholds will occur every three years, beginning on January 1, 2020.

CONTACT A LOS ANGELES EMPLOYMENT ATTORNEY AT THE AZADIAN LAW GROUP, PC

To contact a Los Angeles employment attorney at the Azadian Law Group, PC and find out more about how we can help you, call 626-449-4944 or send us an email via this contact form.

At the Azadian Law Group, PC, our lawyers exclusively represent employees and consumers – we never represent employers. This has endowed our attorneys with the experience, knowledge, insight and resources necessary to effectively represent our clients in any legal setting and bring their cases to favorable resolutions.

From offices based in Pasadena, our attorneys provide exceptional legal service and representation to people throughout Los Angeles County, Riverside County, San Bernardino County, San Diego County and the state of California.

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Types of Employment Cases We Handle in Los Angeles, CA

The following presents an overview of the broad range of employment law cases that our employment attorneys are experienced at overseeing and favorably resolving.

Wrongful Termination

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Age Discrimination

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Pregnancy Discrimination

Pregnancy Discrimination Lawyer in Los Angeles, CA At Azadian Law Group, PC, our pregnancy discrimination lawyer in Los Angeles, regularly represents clients who are the victims of pregnancy discrimination in…

Sexual Harassment

Sexual Harassment Attorney in Los Angeles, CA The Los Angeles Sexual Harassment Lawyers at Azadian Law Group, PC know that in today’s modern era some people often make the mistake…

Racial Discrimination

Racial Discrimination Lawyers in Los Angeles, CA Azadian Law Group, PC regularly represents clients throughout Los Angeles who are the victims of racial discrimination at work. The Los Angeles Race…

Disability Discrimination

Disability Discrimination Attorneys in Los Angeles, CA There is a misconception that disabled people do not want to work or that disabled individuals simply cannot or will not be as…

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