UNDER NEW FEDERAL REGULATION: THOSE EARNING BELOW $47,000 TO QUALIFY FOR OVERTIME PAY - July 11, 2016
Federal regulation makes 4.2 million employees eligible for overtime
By Cheri Cannon, Federal Times
Not all employees will walk away happy when a new Department of Labor regulation, signed into law by President Barack Obama last month, goes into effect on Dec. 1. Under the new regulation, most salaried workers who earn up to $47,476 annually will qualify for time-and-a-half overtime pay when they work in excess of 40 hours per week. This salary threshold is more than double the previous threshold set at $23,660 in 2004. Similarly, highly compensated employees, or employees who, in the preceding year, owned 5 percent of the company or received compensation over $120,000 will see an annual salary threshold increase from $100,000 to $134,004.
Salaried workers earning between the two thresholds, who work primarily in an “executive, administrative, or professional” capacity will continue to be exempt from receiving overtime pay under the new regulation, and thus disputes regarding the meaning of this exception will also continue. According to the Office of Personnel Management, which is responsible for the administration of the Fair Labor Standards Act (FLSA) for federal employees, this language shall be “narrowly construed to apply only to those employees who are clearly within the terms and spirit of the exemption.”