Final Overtime Rule: Exempt vs. Non-Exempt Employees

New and Final Overtime Rule

The updated act of the overtime rule for exempt versus non-exempt employees has been released as of May 18, 2016. This final rule will benefit many workers and allow for future updates to wage and salary levels to be streamlined.

1. The standard salary level is set at $47,476, which is the 40^th percentile of income of full-time salary workers in the lowest-wage Census Region. The threshold is now raised to a weekly rate of $913.
2. Total annual compensation requirement for high compensated employees (HCE) is set at $134,004.
3. The salary and compensation level will be automatically updated every three years.
4. Employers will be able to use non-discretionary bonuses, incentives, and commissions to satisfy 10% of the new standard salary level, as long as employers pay quarterly or more frequently.

As of December 1, 2016, the act will go into effect. Future updates will occur every three years starting on January 1, 2020. For more information on this rule, visit the U.S. Department of Labor website.