Nonexempt FLSA Earnings Threshold

It is official – we have the number, now it’s time to consider the effect.

The number is $47,476 annually.  That’s the 40th percentile of earnings of full-time salaried workers in the lowest paid census region, the South.  And it adjusts every three years (the original rule would have adjusted every year but for voracious feedback from the HR community).  If you pay an employee less than that (in most cases), you’ll need to determine what next steps to take once the law takes effect on December 1, 2016.

Here’s a link to the DOL announcement:

According to a DOL Blog post, you have these options:


No mention here of how some employers have already determined their options – cut pay of employees so that new base plus overtime equals current salary, or potentially reduce employment to be able to afford this new regulation.  I heard recently that one fast-food employer was getting ready to introduce self-service kiosks to take orders…

Perhaps the President and the Department of Labor didn’t anticipate any resistance, but a bill has been introduced (HR 4773 / S 2707) that will require that before the new regulations can become effective later this year that the Department of Labor conducts a thorough economic analysis of the impact, and that any automatic updates to thresholds be overridden.  These bills have not yet passed, and since they’d still have to get past the President would be unlikely to in their current form.

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