July 1, 2016 — that is when the Department of Labor is expected to issue new rules to raise the eligibility ceiling for overtime pay from $23,660 annually to as high as $50,440.
DOL Announces Date to Issue New Rules Regarding Overtime
July 1, 2016 — that is when the Department of Labor is expected to issue new rules to raise the eligibility ceiling for overtime pay from $23,660 annually to as high as $50,440. Because of this, “companies are looking closely at whether employees are classified correctly as hourly or salaried,” says Richard Alfred, who heads the wage-and-hour litigation practice at law firm Seyfarth Shaw.
As well as raising the threshold, there might be a broader definition of who is entitled to overtime pay, even at a salary that is lower than the new dollar threshold. Currently, the standard is set by main duties, not how much time is spent on other tasks. A store manager who puts in some hours stocking shelves or helping customers, for instance, still qualifies as a manager — and is thus exempt from overtime pay — because managing other employees is his or her main job.
Instead, the new DOL rules could replace the primary-duties test with what’s known as the California Test (named after the Golden State’s overtime law), which states that someone who spends more than 50% of his or her time on non-exempt tasks is eligible for overtime pay, even if his main job is usually considered exempt. In other words, a store manager who stocks shelves or serves customers for more than half of her time would be entitled to overtime, whether or not her salary meets the new, higher threshold.