On May 18, 2016, the Department of Labor announced the publication of its final rule updating the overtime regulations (“Overtime Rule”) under the Fair Labor Standards Act (FLSA). The FLSA applies to “Covered Enterprises” as well as individuals. Covered Enterprises include businesses with annual sales or business of at least $500,000. However, hospitals, businesses providing medical or nursing care for residents, schools and preschools, and government agencies are “named enterprises,” meaning they are covered by the FLSA regardless of their total annual sales or business done. Under individual coverage, employees may be entitled to FLSA protection if they themselves are engaged in interstate commerce or in the production of goods for interstate commerce.
The Overtime Rule, both current and revised, applies to an employee of a CE unless the employee is “exempt.” The FLSA’s exemptions include ”bona fide” Executive, Administrative, and Professional employees as well as certain computer professionals and outside sales employees. The DOL’s revised rule will increase the number of employees that are not exempt from the Overtime Rule. The newly revised rule focuses primarily on updating the salary and compensation levels needed for Executive, Administrative and Professional workers to be exempt. Specifically, the revised rule:
1. Sets the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South ($913 per week; $47,476 annually for a full-year worker);