DOL’s Overtime Rule Takes Effect Soon

The U.S. Department of Labor’s final rule restricting the number of employees eligible to be treated as exempt goes into effect Thursday, Dec. 1. It could be rescinded as soon as late January, however, by a new administration or federal courts.

The rule raises the salary threshold for white-collar exemptions from $23,660 a year to $47,476 a year. Any employee paid a salary of less than $47,476 must be paid overtime for all hours beyond 40 in a work week.

The final rule also:

• Provides a mechanism to raise the salary threshold every three years, with the first update scheduled for Jan. 1, 2020.
• Allows for bonuses, incentive payments and commissions to be counted toward the threshold under certain circumstances.

Failure to comply with the new requirements can result in violations of the Fair Labor Standards Act and potential penalties.

In the summer issue of Ag Innovator, attorneys David James and Joe Schmitt advised members to identify employees who earn between $23,660 and $47,476 and develop strategies for responding to the change. To see the attorneys’ column in its entirety, go to FarmEquip.org/AGI_summer2016.