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Overtime Rules

The Department of Labor has made major changes to the rules governing overtime pay under the Fair Labor Standards Act. Here are some answers to frequently-asked questions:

 

Q. Under the new rules, who qualifies for overtime pay for work in excess of 40 hours per week?

 

A. Employees, whether salaried or hourly, who earn less than $913 per week (or less than $47,476 per year) regardless of job duties. In addition:

* Employees who do not primarily perform duties of an executive, administrative, or professional employee. These duties (defined below) have changed significantly, limiting the number of employees who are exempt.

* First responders, licensed practical nurses, and "blue collar" workers.

 

Q. Who is exempt from overtime pay under the new rules?

 

A. Here is a rundown of the exemptions:

* Employees who earn at least $47,476, including $913 or more per week in salary, but not more than $134,004 annually, and who regularly and customarily perform one or more duties of an executive, administrative, or professional employee.

* Employees defined as "highly compensated."  These are employees who earn more than $134,004 per year, including at least $913 per week in salary, and perform one or more duties of an executive, administrative,  or professional employee. For the purposes of determining exempt status, the Department of Labor (DOL) defines the tests for executive, administrative, and professional employees below.

* Outside salespersons whose primary duties are to make sales or obtain contracts and who are regularly and customarily employed away from the employer's place of business.

* Certain computer employees.  For details, see the DOL Web site at www.dol.gov/fairpay.

 

Q. How are employees defined for overtime purposes?

 

A. It depends on the duties:

 

Executive employee

* The employee's primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise.

* The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent.

* The employee must have the authority to hire or fire other employees, or the employee's suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.

 

Administrative employee

* The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week.

* The employee's primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers.

* The employee's primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

 

Professional employee

* The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week.

* The employee's primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment.

* The advanced knowledge must be in a field of science or learning.

* The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

 

See complete details at  www.dol.gov/fairpay.