Proposed Changes to the FLSA Overtime Rule

• Employers must pay overtime (time and a half) for work beyond 40 hours in a week to all workers earning up to $913 per week or $47,476 annually.
• Up to 10% of the salary level used to make the calculation can come from non-discretionary bonuses, incentive payment, and commissions. (Previously, there’s been no provision to count those.)
• The salary and compensation levels will be updated every three years, to meet the 40th percentile of full-time salaried workers in the lowest-wage Census region (currently the South).
• No changes were made to the “duties test” to determine exemption.

• If you currently earn $47,476 or more: This doesn’t change anything for you.
• If you currently earn less than $47,476 and are currently classified as non-exempt (meaning you’ve been legally required to get overtime pay all along): This doesn’t change anything for you.
• If you currently earn less than $47,476 and are exempt (meaning you previously haven’t been subject to overtime laws): You’re in the group impacted by this. You will now be required to receive overtime pay (time and a half) for any hours over 40 that you work in a week. You will also be required to start tracking your hours, including things like logging into your work email from home. In addition, you may see some or all of the following from your employer:
• Your employer may limit you from working overtime (in order to avoid new costs of paying for that overtime).
• If you regularly work more than 40 hours a week, your employer might choose to reduce your base hourly wage to account for the overtime pay you’ll need to receive, in order to ensure that your overall annual compensation stays about where it is now.
• If you’re used to having flexibility in your schedule, that might change, depending on how your employer handles this. For example, let’s say that currently your employer lets you work 50 hours this week, 35 hours next week and 40 hours the following week, trusting you to simply get the job done without scrutinizing your hours. Under the new rule, that will probably be much harder to do, since those hours over 40 will now cost your employer more.
• If you’re pretty close to the $47,476 threshold and/or you work significant amounts of overtime, your employer may raise your salary to meet it in order to keep you exempt. If that happens, nothing else in the list above should apply to you.