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Changes coming to the overtime salary threshold in 2016

The U.S. Department of Labor has announced two changes to the Fair Labor Standards Act that will take effect in 2016. California workers might want to be aware of changes to overtime pay to maintain an understanding of when they should receive extra earnings. The purpose of these changes is to minimize the risk of workers who are entitled to overtime being misclassified because of their salaries.

Under the FLSA, employees must receive overtime pay for each hour that they work longer than 40 hours in a single week. The DOL has proposed more than 100 percent increases in the salary thresholds that qualify for exempt status. These changes will apply to administrative, computer, executive and professional workers who are safeguarded under the overtime and minimum wage protections in the FLSA.

The salary threshold is currently set at $23,660 a year or $455 a week. The proposed regulation will set it at $47,892 a year or $921 a week according to 2013 data, which is $50,440 a year according to 2016 data, or at 40 percent of weekly earnings for full-time workers who receive salaries. It will also increase the exemption threshold for overall compensation that highly paid employees receive from $100,000 a year to $122,148 a year or 90 percent of weekly earnings.

Additionally, the DOL has proposed regulations that will put a mechanism in place to automatically update the compensation and salary levels in the future to ensure that the exemption remains accurate. One method of updating them is based on a certain percentage of earnings for salaried employees who work full time. The second method is based on fluctuations in the Consumer Price Index.

When workers who are entitled to overtime pay do not receive the amounts they are owed, they may have legal remedies. An attorney who handles wage claims can often be of assistance in seeking recovery.

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