Guidance about New Federal Overtime Rule


OMA Connections Partner, Clark Schaefer Hackett, reminds employers that new overtime eligibility regulations are set to take effect December 1.  The new regulations include the following changes:

  • Employees who earn less than $913 per week (or $47,476 annually) will now generally be eligible for overtime pay.  The old minimum threshold was $23,660 annually.
  • The salary threshold will automatically update every three years, reaching more than $51,000 in January 2020 by Labor Department estimates.
  • Bonuses and commissions can satisfy up to 10% of the new salary level.

But there’s a wrinkle.  The new overtime regulations were set to become effective December 1, 2016.  However, on September 28, 2016, the U.S. House voted and passed a bill (H.R. 6094) that would delay the effective date to June 1, 2017.  With Congress adjourned until mid-November, the U.S. Senate will have very little time to vote during its lame duck session on the bill.  Even if it passes in the Senate, most expect President Obama to veto the act, thus putting the December 1, 2016 date back in to effect. Therefore, Clark Schafer Hackett advises that businesses should continue to prepare for the overtime rules as though there were no legal challenges, as they are far from certain to succeed. The rules as of now are still set to take effect December 1, 2016. Here’s guidance from Clark Schaefer Hackett10/12/2016