Business of Well-being

New Federal Overtime Rules Help Exempt Employees

In America, we take our employment very seriously. However, workers are not always fairly compensated for the time and effort they give to a company. For this reason, the U.S. Department of Labor created the Fair Labor Standards Act (FLSA) to prevent employees from being overworked and underpaid.

Now, the U.S. Department of Labor has created an exciting new rule, the "federal overtime rule", which will positively affect hard-working employees across America.

Employees who are most likely to benefit from the new rule are those who are considered "exempt." Exempt employees are excluded from minimum wage regulations and overtime pay because they receive pay on a salaried basis.

These workers are paid a fixed amount each week, regardless if they work 40 hours or more. However, if many of these employees were compensated on an hourly basis, their rate would be no less than the current minimum wage amount of $7.25 per hour, which would equal 1.5 times their current salaried pay after working only 40 hours.

With a salary, some workers end up making less money while working more hours - something the Department of Labor set out to change, once and for all.

The highly anticipated federal overtime rule states that salaried employees must make a minimum of $47,476 annually. If they make less than this, they must be compensated for overtime. This is double the current federal minimum salary of $23,660, which is an outstanding increase! The rule will officially go into effect December 1, 2016.

It has been over 10 years since the minimum salary threshold has been examined, and the new rule signifies a big win for exempt workers all over the country. Moving forward, the minimum salary threshold will now be automatically updated every three years! No longer will employees feel like they are working past the normal expectations of "full-time" requirements while making less money.

Ultimately, it is important to recognize the impact of this rule, revealing how the Department of Labor is actively examining our current laws and practices to ensure employers are being fair and consistent with each employee.

When employees are properly compensated, they are usually more productive and motivated to give their best effort in the workplace. This will become a more common occurrence, and employees can continue to work knowing their wage is fair and their work is valued.

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