Overtime-ageddon: Update on Implementation of New Overtime Rule

This is an update to my previous 2 articles on the new overtime regulation that will radically increase the number of American workers who must be paid overtime.  Essentially, when the new regulation goes into effect, any employee making less than $50,440 a year (as opposed to the current minimum of $23,660) will no longer be exempt from overtime pay under the “white collar exemption.”  This is the most utilized exemption, which exempts employees who are paid salaries, make more than the minimum level, and perform administrative, professional or executive functions.

The proposed rule was published on July 6, 2015.  Differences between the proposed and final rule won’t be made public until the final rule is issued.  On March 14, the rule appeared on the website reginfo.gov, indicating that it is now under review by the Office of Management and Budget – the last stop before publication in the Federal Register.

What does this all mean?  Regulations must go into effect within 60 days of publication.  Commentators are expecting either that the rule will be published on July 7th and be implemented on Labor Day, September 5th, or be published September 2nd and go into effect November 1st – just before Election Day.

Either way, employers need to take immediate action to review their job descriptions to ensure that they aren’t blindsided by a huge increase in overtime pay.  For my recommendations, you can read my earlier post here.

As always, you can reach me at 615-916-3224 or tmckee@mckenzielaird.com with questions.

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