In May, the Department of Labor (DOL) finalized a rule that will have a significant impact on many Big “I” agencies and their business clients.

The DOL rule updates a regulation that exempts certain employees from overtime and minimum wage requirements commonly referred to as the “white-collar” exemptions. The new rule will require that employers pay overtime to many employees who were not previously entitled to it. Employers should review employee salaries and overtime eligibility status and adjust them to comply with the new rule before it takes effect Dec. 1.

In an effort to help member agencies better understand the implications of the DOL overtime rule, the Big “I” has prepared related resources. Most recently, the association updated a Q&A document, originally prepared immediately after the DOL finalized the rule. The update includes more than a dozen new questions and answers to help Big “I” members navigate the ins and outs of the rule.

The Q&A document, The DOL Overtime Rule Questions and Answers, is available on the Big “I” website on the government affairs page. Members must log in to view the document. 

The Big “I” also provided a free webinar, Overtime Regulation and Employee Classification, on June 22. A recording of the webinar is now available online.

Under the overtime rule:

• Employers must either re-classify as non-exempt or raise the salary of any employee who makes less than $47,476 and is currently classified as exempt under the administrative, executive, professional or computer “white-collar” exemptions to the Fair Labor Standards Act (FLSA). The $47,476 threshold is a 100% increase from the current $23,660 threshold.
• Nondiscretionary bonuses and incentive payments, including commissions, may satisfy up to 10% ($4,747.60) of the $47,476 salary threshold.
• Any employee who is classified under the “highly compensated employee” exemption must earn at least $134,004 in total compensation. The $134,004 threshold is a 34% increase from the current $100,000.
• Both the $47,476 and $134,004 thresholds will automatically update every three years, starting in 2020. With the first update, the thresholds are estimated to reach $51,168 and $147,542, respectively.

Jennifer Webb is Big “I” federal government affairs counsel.