38346335 - mechanic holding vintage clockOn December 1, 2016, the salary levels of employees who will be exempt from overtime will change. On that day, the new standard salary level of exempt employees will increase to $913 per week or $47,476 per year, with automatic updates taking place every 3 years. Employees not earning these noted minimums will be entitled to overtime pay.

Employers may respond by increasing the salary of employees so they reach exempt status, or by reducing, if not eliminating, overtime hours. Some employers may opt to reduce the amount of pay allocated to base salary within allowable minimum hourly rates and add pay to account for overtime, this way holding the weekly pay budget at a constant level.

Nothing in the new rule will require employers to change their employees’ pay to hourly from salaried.

Additional clarifications are available at www.dol.gov/whd/overtime/final2016/faq.htm