By Danielle Capilla
Chief Com­pli­ance Offi­cer at Unit­ed Ben­e­fit Advisors

After a long wait, the Depart­ment of Labor (DOL) has released the revi­sions to the white col­lar over­time exemp­tion rules in the Fair Labor Stan­dards Act. The new rule becomes effec­tive on Decem­ber 1, 2016.

Gen­er­al­ly speak­ing, the Fair Labor Stan­dards Act applies to employ­ees of “enter­pris­es.” Enter­pris­es are:

  • A fed­er­al, state, or local gov­ern­ment agency
  • A hos­pi­tal; or an insti­tu­tion pri­mar­i­ly engaged in the care of the sick, the aged, or the men­tal­ly ill or devel­op­men­tal­ly dis­abled who live on the premis­es (it does not mat­ter if the hos­pi­tal or insti­tu­tion is pub­lic or pri­vate or is oper­at­ed for prof­it or not-for-profit)
  • A pre-school, ele­men­tary or sec­ondary school or insti­tu­tion of high­er learn­ing (e.g., col­lege), or a school for men­tal­ly or phys­i­cal­ly hand­i­capped or gift­ed chil­dren (it does not mat­ter if the school or insti­tu­tion is pub­lic or pri­vate or oper­at­ed for prof­it or not-for-profit)
  • A com­pa­ny or orga­ni­za­tion with annu­al dol­lar vol­ume of sales or receipts in the amount of $500,000 or more

Employ­ees may still be cov­ered even if an employ­er isn’t an enter­prise, due to inter­state com­merce requirements.

Non-exempt, or “over­time eli­gi­ble,” work­ers in the Unit­ed States are enti­tled to time-and-a-half pay for their hours worked after 40 hours in a week. Some spe­cif­ic jobs are con­sid­ered exempt, such as air­line employ­ees, farm­work­ers, sea­men on Amer­i­can ves­sels, switch­board oper­a­tors, and exec­u­tive, admin­is­tra­tive, pro­fes­sion­al and out­side sales employ­ees who are paid on a salary basis.

The “white col­lar” or “EAP” exemp­tion cov­ers exec­u­tive, admin­is­tra­tive, pro­fes­sion­al, out­side sales, and com­put­er employ­ees. The white col­lar exemp­tion salary lev­el was last set in 2004 at $455 a week or $23,660 a year. That salary lev­el is now below the fed­er­al pover­ty lev­el for a fam­i­ly of four. The new stan­dard is $913 a week or $47,476 annually.
For infor­ma­tion on how a white col­lar employ­ee qual­i­fies for an over­time exemption—as well as the thresh­old for high­ly com­pen­sat­ed employ­ees and how to cal­cu­late salary—download UBA’s Com­pli­ance Advi­sor, “Over­time Exemp­tion Rules Arrive”.

Read more here …