Good news for American workers: new federal overtime rules are going into effect at the end of the year. Back in 2014, President Obama directed the Secretary of Labor to draft now overtime regulations that would live up to the original intent of the Fair Labor Standards Act, while simplifying rules to make them easier for workers and businesses to understand and comply with. The department has now issued a final rule that will put money back into the pockets of middle class workers – or give them more free time.
The final rule will:
- Increase the salary threshold for overtime eligibility from $455/week to $913 ($47,476 per year), expanding overtime coverage to 4.2 million workers.
- Automatically revise the salary threshold every 3 years to align with wage growth over time.
- Reinforce overtime protections for salaried workers already eligible for overtime.
- Clarity the rules for workers and employers.
The updated overtime rules become effective on December 1, 2016, providing a six month window for employers to prepare. The final rule does not include any changes to the duties test for executive, administrative and professional employees.