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Sterling Employment Law

New Fair Labor Standards Act overtime threshold on the way

Michiganders who have been wronged in their place of employment may choose to pursue a wage claim or a claim based on a denial of benefits. These individuals should recognize that every employee is protected under the law, including those who are salaried white collar workers. With that in mind, the U.S. Department of Labor has announced a minimum salary that white collar workers must receive in order for them to be viewed as exempt from the overtime rules under the Fair Labor Standards Act (FLSA). With this announcement, these employees must earn $47,476 annually to be considered exempt. This will begin in December of 2016, and could be a financial boon for those struggling to make ends meet.

Currently, the majority of white collar workers are exempt from the rules governing overtime under FLSA. This goes for supervisors, administrative employees, and other professionals. There must be two conditions met for them to be considered exempt from overtime regulations. Under the old rule, these individuals must be performing duties that are exempt under DOL rules, and they must be paid a minimum of $455 weekly or $23,660 per year.

The new rule raises the weekly salary to $913 weekly in order to qualify for overtime. This is the 40th percentile of what is earned for full-time workers based on the lowest incomes in the Census. The way in which the amount will be determined will be linked to this calculation from now on. Also, the new rule means that employees who are deemed as "highly compensated employees" will rise from $100,000 annually to $134,004 annually. This is the 90th percentile according to the Census.

With these new rules, there will of course be the possibility that an employer might violate them in some way. In fact, there is the possibility that some employees were not aware that their rights under FLSA were violated under the law's current incarnation. If there is confusion about the current laws or new laws and whether or not a violation has occurred, it might be wise to speak to an attorney experienced in helping clients with their employee rights..

Source: National Law Review, "DOL Announces Final Rule on Salary Threshold for Exempt White-Collar Employees," Richard Hooker, May 18, 2016

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