May 18, 2016, the US Department of Labor (DOL ) announced its final rule to 
increase overtime eligibility to millions of US citizens under the Fair Labor Standards Act (FLSA). This new rule will come into force on 1 December 2016. Although the final rule results in higher costs for employers, it can save money in the long run by increasing the retention of employees who are covered by the rules FLSA.
Who is covered by the rules of the FLSA?
LSF provides Americans with the right time and a half-compensation for time worked over 40 hours per week. The rules FLSA, including the final rule, cover employees of private companies or nonprofit organizations with annual gross volume of sales or business made $ 500,000 or more. The FLSA rules also apply to employees of federal, state and local governments.
In addition, employees are not covered by the wide-based rule can be covered individually by the FLSA rules if they regularly engage in interstate commerce. The courts have interpreted interstate commerce rather broad :. US using regular mail to send letters to other states or to place calls to other states that use of the company's phones are considered as examples of participation in interstate commerce
Overtime Exemption
for an employer to claim that it is exempt from overtime pay to a certain employee, three criteria must be met :.
- The employee must be paid a fixed salary
- salary of the employee must meet a minimum level of wages.
- main tasks of the employee must be the type of work associated with senior management ,,, sales outside or IT staff Administrative Professionals.
Increasing the minimum wage threshold
Final Rule DOL regulates the minimum wage level necessary for an employer to claim the exempt status for overtime. The salary threshold for exemption white collar changed once since the 1970s for standard wages, the final rule increases the salary level of $ 23,660 (or $ 455 per week) to $ 47,476 ($ 913 per week). For highly compensated employees (HCE), the final rule also increases the level of annual remuneration of the 0th percentile of the full-time salaried workers nationwide, ie, from $ 100,000 to $ 134,000 per year. To prevent the salary threshold to become obsolete in the future, the new FLSA rule requires an automatic update every three years.
Incentive Pay
Although not allowed in the past, employers can now use commissions, non-discretionary bonuses and other incentive payments to reach the salary threshold for exemption. There are limits to this change. For example, only 10% of employee salary level can be paid as an incentive, and it must be paid quarterly.
Conclusion
Employers must reassess their employees to determine which workers qualify for overtime. This determination must be based on the three tests summarized above, including the minimum wage threshold updated. Employers must also schedule automatic updates of the minimum wage threshold every three years, beginning on 1 January 2020. The final rule becomes effective 1 December 2016; which gives employers about six months to implement the changes required by the regulations updated.
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