The pressure’s on for final rule from the DOL
Be on the lookout: The revised overtime regs may be finalized by May 16, 2016. Otherwise, they risk being overturned in 2017 when there’s a new President and new Congress, the Congressional Research Service said in a recent reports.
Agency rules issued toward the end of administration can be subject to a resolution of disapproval under the Congressional Review Act.
In July 2015, the Dept. of Labor (DOL) proposed changes to the Fair Labor Standards Act Regs.
In particular, the DOL, rule said the salary threshold for “white collar” exemptions from minimum wage and overtime should go up – way up.
For 60 days, concerns about the financial impact flooded in. But the DOL closed the comment period with extension on Sept 4, 2015.
One Ray of hope: The DOL had asked for comments on whether the salary threshold calculations should include these payments:
Nondiscretionary bonuses, and
That would help the bottom line, but here’s what Payroll would be facing based on the proposed rule.
Areas to watch
Nondiscretionary bonuses and incentive pay would need to be capped at 10% of the salary threshold, so that would require some number crunching.
The DOL has proposed that the “white collar” salary threshold equal the 40th percentile of all full-time salaried employees. In 2016, that’d be about $970 per week.
As for the highly compensated employee (HCE) annual compensation level, that’d equal the 90th percentile of earnings for full-time salaried workers, about $122,148 annually.
You’d need to issue payments for nondiscretionary bonuses and incentive pay at least monthly.
Yearly catch-up payments, which are currently permitted with the HCE exemption, wouldn’t likely be allowed for the “white collar” exemptions.
You’d have to determine if bonuses you pay meet the definition of nondiscretionary because the rule doesn’t include discretionary bonuses.