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The Fair Labor Standards Act: New Overtime Rules

By Attorneys Karyn P. Forbes and Sean T. O’Connell

As of December 1, new overtime rules under the Fair Labor Standards Act (FLSA) take effect and will have an impact on employees in for-profit and nonprofit entities. The changes affect compensation.

Unless specifically exempted, employees covered by the Fair Labor Standards Act (FLSA) must receive pay for hours worked in excess of 40 in a workweek at a rate not less than one and one-half their regular rates of pay. This is referred to as overtime pay.

As of December 1, 2016, the new rules increase the standard salary level from $455 per week ($23,660 for a full-year worker) to $913 per week ($47,476 for a full-year worker). Highly compensated employee salary increases from $100,000 to $134,000.

It should be noted the employee exemptions have not changed.

How do the changes affect businesses? Generally, employees of enterprises that have an annual gross volume of sales made or business done of $500,000 or more are covered by FLSA. In addition, employees of certain entities are covered by the FLSA regardless of the amount of gross volume of sales or business done. Those entities include hospitals, businesses providing medical or nursing care for residents, schools (whether operated for profit or not for profit), and public agencies.

Exempt employees are generally:

  • Salaried
  • Paid more than a specified weekly salary level, which will be $913 per week as of December 1
  • Primarily perform executive, administrative, or professional duties, as defined by the standard duties test (which has not changed)

In order to best respond to these changes, employers are encouraged to review employee salaries and employment classifications as well as timekeeping procedures and trainings. Employers can raise salaries, pay overtime, adjust work hours and schedules, and adjust wages.

For additional information, visit the U.S. Department of Labor website.

To speak with a New Hampshire employment attorney, please contact Shaheen & Gordon, P.A.