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Prepare for Department of Labor’s proposed new overtime rule

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in Human Resources,Overtime Labor Laws

by Thomas I. Plotkin, Esq., Pepper Hamilton LLP

On July 6, the U.S. Department of Labor (DOL) published a long-anticipated proposed rule that would make overtime pay available to nearly 5 million workers who are currently exempt from the Fair Labor Standards Act’s (FLSA) overtime requirement. The proposed rule would raise the minimum salary level for overtime exemption and raise the salary threshold for certain highly compensated employees.

3 current tests

The FLSA provides overtime exemptions for “any employee in a bona fide executive, administrative, or professional capacity . . . or in the capacity of outside salesman.” Certain other employees, such as computer-related professionals, are also exempt.

To be considered overtime-exempt, employees must meet all three of these tests:

  • The salary basis test, which asks whether an employee is being paid a predetermined amount each pay period, which cannot be reduced based on qua...(register to read more)

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