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New Overtime Pay & Compliance Rules

The U.S. Department of Labor (DOL) rules are confusing and seem to be changing. Although they have attempted to simplify the Fair Labor Standards Act (FSLA) regulations, to help employers decide which employees are exempt, (those not eligible for overtime); compared to nonexempt employees, (who indeed are eligible for overtime), the DOL has churned up more disputes and lawsuits.

Expect more change and therefore, more confusion as the DOL proposal to dramatically increase the lower-end salary limit at which employees are guaranteed overtime pay could be finalized soon.

Current rule reminder:
Salary threshold. Employees earning less than $23,660 annually (or $455 a week) qualify for overtime pay. Highly compensated employees earning $100,000 a year are precluded form earning overtime.

Duties test. Employees who meet the revised salary test must also meet the “duties test” to be considered exempt.

Audit your Compliance
1. Evaluate each job
2. Check your state’s law (IL has its own employee classification rules that contradict federal law)
3. Draft a “safe harbor” policy.

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