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Changes to Federal Overtime Rules are Still Taking Shape

December 5th, 2017
Changes to Federal Overtime Rules are Still Taking Shape

The U.S. Department of Labor (DOL) had finalized a proposed rule for refreshing the existing federal overtime rules under the Fair Labor Standards Act. The proposed changes that were set to go into effect in December of 2016, however, were challenged and then stalled in court. With the new presidential administration, the DOL has scrapped the earlier proposed rule and is gathering further information from business owners on setting the salary level for overtime exemptions.

Salary Level for Overtime Exemptions

The federal standard salary level was set in 2004 at $455 per week, and this reflects the salary that must be met before employees can be classified as exempt from overtime. Within this metric, the DOL is considering a variety of variables:

  • Should the DOL set multiple salary levels based on location, industry, size of business, type of employment, and specific occupation (along with other factors)?
  • Should the DOL set different standard salary levels for the executive, administrative, and professional exemptions as it did before the changes set in 2004?
  • How should the salary level be determined – at the pre-2004 short-test level; at the pre-2004 long-test level; between the two levels; or by using a different methodology?
  • Should the DOL do away with salary level and focus instead on an exemption test that considers the duties required by employment?
  • In preparing for the previously proposed federal overtime rules that were to go into effect in December 2016, how far did employers go in increasing the salaries of exempt employees, decreasing the hours of (would-be) newly nonexempt employees, or implementing other employment strategies for dealing with the new salary level? What effect did these changes have?
  • How should nondiscretionary bonuses be factored in?
  • For highly compensated employee exemptions, should there be multiple total annual compensation levels?
  • Should the standard level and the highly-compensated level be automatically updated periodically? If so, on what schedule and how?

Salary Levels and Your Business

There’s obviously a lot to consider, and the new federal rules, when they are implemented, are bound to have a significant effect on many businesses across the country. If you are interested in reading what those weighing in with the DOL regarding these important employment issues, the deadline was September 25, 2017, and you can find the instructions here.

If You Have Questions about Federal Overtime Rules, Call 732 238-8686 for More Information Today

The new federal overtime rules, when they do materialize, are almost certain to affect New Jersey businesses. In the meantime, many employers are confused about how to proceed. No matter what business questions you have, Bowne Barry & Barry Attorneys at Law is here to help. Our skilled business attorneys have the experience, dedication, and knowledge to guide you through your employment issues and to help keep you compliant with federal regulations. For effective legal guidance, please contact or call the law office of Bowne Barry & Barry at 732 238-8686 today.