I woke this morning to Canadian rock group Bachman-Turner Overdrive doing their iconic 70's hit, Takin’ Care of Business. As I danced to the kitchen on those major and minor riffs, I brewed my newly acquired Detroit Bold coffee, and I belted out the most memorable line, “Takin’ care of business and workin’ overtime.” (For those not familiar with the tune go check it out on YouTube, I guarantee you’ll be dancing and playing air guitar)
Today we can't dance around the topic of overtime. Back in 2014, President Obama directed the Secretary of Labor to update the rules on overtime pay, and this year, the President and Department of Labor Secretary Perez have announced the final rule updating the overtime regulations to reflect the original intent of the Fair Labor Standards Act.
What the new rule does:
- Extends overtime pay protections to over 4 million workers (within the first year of implementation)
- Simplifies and modernizes the rules so they’re easier for workers and businesses to understand and apply.
- Raises the salary threshold indicating eligibility from $455/week to $913
- Strengthen overtime protections for salaried workers already entitled to overtime.
- Provide greater clarity for workers and employers.
- Sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test to the annual equivalent of the 90th percentile of full-time salaried workers nationally ($134,004)
- Establishes a mechanism for automatically updating the salary and compensation levels every three years
- Amends the salary basis test to allow employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.