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Godfrey & Kahn Updates

New wage and hour rules published today; most employers must comply by December 1, 2016

May 18, 2016

The long-anticipated final wage and hour regulations were made public today, May 18, 2016, but they will not be officially published in the Federal Register until Monday, May 23, 2016. The final rule updates the salary threshold under which most white collar workers are entitled to overtime compensation to equal the 40th percentile of weekly earnings of full-time salaried workers in the lowest wage census region, currently the South. The final rule will raise the salary threshold from $455 per week ($23,660 for a full-year worker) to $913 per week ($47,476 for a full-year worker). The new rule also raises the salary threshold on the highly compensated employee exemption to $134,004 per year. The U.S. Department of Labor will revise (presumably increase) the salary thresholds every three years. The new rule will be effective December 1, 2016.

Although the final salary threshold for the white collar exemptions is lower than originally proposed ($970 per week), the new threshold more than doubles the minimum salary currently guaranteed to most exempt employees.

We will continue to evaluate the new rule and the implications it will have for employers. Stay tuned for future analysis of the law on our blog. As always, feel free to contact any member of our Labor & Employment Team with questions regarding the new rule.

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