On May 18, 2016, the U.S. Department of Labor (DOL) published the final rule on overtime regulations. The DOL breaks down the final rule into three major provisions:
- 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)
- 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
The final rule will take effect on Dec. 1, 2016. Initial increases to the standard salary level and the HCE total annual compensation requirement will take effect on this date.
For more information, please refer to the Automotive Service Association’s (ASA) interactive webinar on the DOL rule, available on ASA’s YouTube page: www.youtube.com/watch?v=tpmBHLK9kPE&t=13s. The recording includes presentations from Brian Farrington of Cowles & Thompson’s Employment Law Practice Group in Dallas; Darrell Amberson, president of operations at LaMettry’s Collision in Minneapolis; and Ed Cushman, president of C&H Foreign Auto Repair in Spokane, Wash. In addition, Farrington has written an article on the subject that can be found here: www.AutoInc.org/wage-hour-update/.
