Susan E. Prince, JD, is a Legal Editor for BLR’s human resources and employment law publications. Ms. Prince has 15 years of experience as an attorney and writer in the field of human resources and has published numerous articles on a variety of human resources and employment topics, including compensation, benefits, workers’ compensation, discrimination, work/life issues, termination, and military leave. Ms. Prince also served as an expert on several audio conferences discussing the 2004 changes to the federal regulations under the Fair Labor Standards Act. Before starting her career in publishing, Ms. Prince practiced law for several years in the insurance industry and served as president of a retail sales business. Ms. Prince received her law degree from Vermont Law School.
Video: Watch Susan's video on the DOL's Proposed Overtime Regulations
In light of the Department of Labor’s (DOL) final overtime regulations under the Fair Labor Standards Act (FLSA), a formal compensation administration program is an important management tool for ensuring that employees are satisfied, that both internal and external equity are maintained, and that control is maintained over compensation costs and the allocation of overtime hours.
Under the final regulations, employers will now be able to count nondiscretionary bonuses, incentive payments, and commissions toward as much as 10% of the salary to determine whether they have reached the salary threshold for exemption from overtime. In order to count, these payments must be paid on a quarterly or more frequent basis. The new rules also permit the employer to make a catch-up payment.
The federal Department of Labor’s (DOL) overtime regulations were updated and modernized in May 2016. December 1, 2016, is the effective date of these regulations. The alarming wave of Fair Labor Standards Act (FLSA) enforcement activity shows a distinct trend and emphasis on FLSA and compensation-related lawsuits brought by the DOL.
The federal Department of Labor (DOL) is releasing the final changes to the overtime regulations. The most prominent change is the increase in the salary level required for exemption from overtime to an annual salary of $47,476. This translates to a weekly salary of $913.
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