What to know about the new overtime laws

Overtime pay can be a great income boost, particularly since eligible recipients are entitled to one and one-half times their regular rate for staying late. However, until recently, a significantly large portion of the private sector was left excluded from these benefits under the overly-broad concept of “exempt employees.” The list of exempt employees, as provided by the Department of Labor, included everything from executives to agriculturalists, as well as seasonal employees, salesmen and computer technicians. Moreover, the rules included an “income threshold” of just $23,660 — meaning anyone earning more than that could be legally excluded from overtime pay.

Fortunately, this threshold was recently expanded — in a big way. As of December 1, 2016, the income threshold will be doubled to $47,476. For workers earning more than this, there still may be opportunities for overtime pay under other Department of Labor regulations, as worker exemptions have been similarly reduced to allow for greater opportunities.

With the new threshold in place, the overtime-eligible employees will expand from 7 percent of the workforce to a substantial 35 percent. Moreover, the measure is expected to boost wages over $12 billion in the next ten years.

In a statement by Vice President Joe Biden, the increase “goes to the heart of the defining issue of our time, that is restoring and expanding access to the middle class.”

While the current threshold has not been updated since 2004, the new measures have a built-in provision requiring regular increases every three years — in step with the inflation rate. As well, the regulations allow employees to include bonuses and incentives in the calculation of their wages, which was previously not permitted.

Contact an experienced employment attorney today!

To learn more about the sweeping changes to overtime laws, please contact Thomas M. Lancia, PLLC today: 212-964-3157.