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When does the new overtime rule take effect?

On Behalf of | Oct 7, 2016 | Employee Rights, Wage & Hour Laws |

This year, Congress passed a new overtime rule that would increase the salary limit of workers who would be eligible for and guaranteed to be paid overtime if they work more than 40 hours a week. The new rule, under the Fair Labor Standards Act (FLSA) is ready to go into effect Dec. 1 this year. However, the U.S. House of Representatives in late September passed a bill that aims to delay that start for six months. It doesn’t seem the rule will actually be delayed, though, as President Barack Obama has released a statement saying he would veto the bill that aims to delay the start of the overtime rule.

Assuming the rule will go into effect as planned on Dec. 1, the changes would be significant. The rule doubles the salary limit of those who would be guaranteed overtime pay under federal law. Right now, for workers to qualify for overtime pay, their salary can be no more than $23,660 per year. Come Dec. 1, if the overtime rule takes effect as planned, the new salary limit for overtime pay is $47,476 per year.

What does the new overtime rule mean?

This means most workers who make a salary under $47,476 per year would be eligible to receive overtime pay at one-and-a-half times their pay for every hour they work above 40 hours per week. When someone is hired and paid on a salary basis, they must legally be classified by the employer as “exempt” or “non-exempt.” Exempt means they do not get overtime pay if they work more than 40 hours per week. Non-exempt means they do legally have to be paid overtime if they work more than 40 hours per week. While the designation of exempt or non-exempt partly has to do with the job duties and how they are classified, it also has to do with the salary level.

Now, employees who were exempt because their salary was above $23,660, can move into non-exempt status and receive overtime pay as long as their salary is below $47,476 per year. This will add overtime pay eligibility to 4.2 million people in the U.S. and is estimated to boost wages by $12 billion over the next 10 years.

Will the salary limit stay the same forever?

The overtime rule will update the salary limit or salary threshold from $47,476 every three years, automatically. This is to make sure employers do not misclassify workers as exempt from receiving overtime, when their salary qualifies them to receive overtime.

The salary level has been updated seven times since 1938. The most recent time before this year’s law was in 2004, when it increased to $23,660 per year.

What if I am eligible to receive overtime pay, but my employer is not cooperating?

Protecting your rights as an employee is not only important to you personally, but may impact your family and your livelihood. Getting the pay that you deserve for extra hours that you work is not a small thing to overlook. If you suspect your employer is not paying you overtime wages when you earned them and are eligible to be paid overtime, an employment law attorney can help you seek justice. You have rights, and an employer should not be taking advantage of its employees unfairly.