The Final Rule regarding the amendments to the Fair Labor Standards Act’s (FLSA) White Collar Exemption Regulations was published by the Department of Labor (DOL) on May 18, 2016 and will become effective December 1, 2016. Affected businesses will have a little more than 6 months to prepare for the changes. The Final Rule increases the minimum weekly salary to the 40th percentile of weekly earnings for full-time salaried workers ($913 per week, or $47,476 annually), boosting the salary threshold for white-collar exemptions to more than twice the current annual level of $23,660. For highly compensated employees, the threshold will be set to the annualized value of the 90th percentile of earnings for full-time salaried workers, or $134,004 annually.
The Final Rule will entitle approximately 4.2 million additional employees to overtime compensation, which will hugely impact employers’ ability to continue to classify certain white-collar employees as exempt.