On May 19, 2016, after being introduced almost a year ago, President Obama announced the publication of the Department of Labor’s (DOL) new overtime rules under the Fair Labor Standards Act, which will be effective starting December 1, 2016. These new regulations are expected to extend overtime pay protections to over four million workers during the first year of implementation, which in turn is expected to cost employers over one billion per year in increased wages. Fundamental modifications include the exempt salary increasing to $47,476, which is over double the previous threshold of $23,660. This ceiling is now set to be updated routinely every three years, beginning on January 1, 2020.
The Office of Management and Budget has examined and approved the new rules, however the document has not been published in the Federal Register as of yet. These revisions do not require Congressional approval, but the Republican majorities in the House and Senate have been encouraged by 17 state CPA societies, including The Ohio Society of CPAs to take action to alleviate the outcome. The state CPA societies have united with the Partnership to Protect Workplace Opportunity to resist and dispute the efforts of the DOL. The goal of these groups is to induce Congress into considering the substantial impact and negative effects the new regulations would have if they are put into action.
Due to the new rules not becoming effective for another six months, employers should have enough time to prepare and plan how the impact will effect staffing and budgets. To read more about the new rules, please use this link here.