United States Government Publishing Office publisher pbl distributor dst United States National Archives and Records Administration Office of the Federal Register author aut Government Organization text government publication eng FR Regulatory Information 2016_register executive 2018-02-07 article Part II Rules and Regulations D09002ee1c7f628ed D09002ee1c7f629b0 United States Department of Labor originator org United States Government Agency or Subagency United States Wage and Hour Division originator org United States Government Agency or Subagency The Fair Labor Standards Act (FLSA or Act) guarantees a minimum wage for all hours worked during the workweek and overtime premium pay of not less than one and one-half times the employee's regular rate of pay for hours worked over 40 in a workweek. While these protections extend to most workers, the FLSA does provide a number of exemptions. In this Final Rule, the Department of Labor (Department) revises final regulations under the FLSA implementing the exemption from minimum wage and overtime pay for executive, administrative, professional, outside sales, and computer employees. These exemptions are frequently referred to as the "EAP" or "white collar" exemptions. To be considered exempt under part 541, employees must meet certain minimum requirements related to their primary job duties and, in most instances, must be paid on a salary basis at not less than the minimum amounts specified in the regulations. In this Final Rule the Department updates the standard salary level and total annual compensation requirements to more effectively distinguish between overtime-eligible white collar employees and those who may be exempt, thereby making the exemption easier for employers and employees to understand and ensuring that the FLSA's intended overtime protections are fully implemented. The Department sets the standard salary level for exempt EAP employees at the 40th percentile of weekly earnings of full-time salaried workers in the lowest-wage Census Region. The Department also permits employers to satisfy up to 10 percent of the standard salary requirement with nondiscretionary bonuses, incentive payments, and commissions, provided these forms of compensation are paid at least quarterly. The Department sets the total annual compensation requirement for an exempt Highly Compensated Employee (HCE) equal to the annualized weekly earnings of the 90th percentile of full-time salaried workers nationally. The Department also adds a provision to the regulations that automatically updates the standard salary level and HCE compensation requirements every three years by maintaining the earnings percentiles set in this Final Rule to prevent these thresholds from becoming outdated. Finally, the Department has not made any changes in this Final Rule to the duties tests for the EAP exemption. 81 FR 32391 https://www.govinfo.gov/app/details/FR-2016-05-23/2016-11754 2016-11754 fr23my16-9 RIN 1235-AA11 4510-27-P https://www.govinfo.gov/app/details/FR-2016-05-23/2016-11754 https://www.govinfo.gov/content/pkg/FR-2016-05-23/html/2016-11754.htm https://www.govinfo.gov/content/pkg/FR-2016-05-23/pdf/2016-11754.pdf Labor Minimum Wages Overtime Pay Salaries Teachers Wages 162 p. 32391 32552 81 FR 32391 Title 29 Part 541 29 CFR Part 541 RIN 1235-AA11 Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees; Federal Register Vol. 81, Issue RULE 2016-11754 II DEPARTMENT OF LABOR Wage and Hour Division 2016-12-01 4510-27-P 2016-11754 Final rule.

The Fair Labor Standards Act (FLSA or Act) guarantees a minimum wage for all hours worked during the workweek and overtime premium pay of not less than one and one-half times the employee's regular rate of pay for hours worked over 40 in a workweek. While these protections extend to most workers, the FLSA does provide a number of exemptions. In this Final Rule, the Department of Labor (Department) revises final regulations under the FLSA implementing the exemption from minimum wage and overtime pay for executive, administrative, professional, outside sales, and computer employees. These exemptions are frequently referred to as the "EAP" or "white collar" exemptions. To be considered exempt under part 541, employees must meet certain minimum requirements related to their primary job duties and, in most instances, must be paid on a salary basis at not less than the minimum amounts specified in the regulations. In this Final Rule the Department updates the standard salary level and total annual compensation requirements to more effectively distinguish between overtime-eligible white collar employees and those who may be exempt, thereby making the exemption easier for employers and employees to understand and ensuring that the FLSA's intended overtime protections are fully implemented. The Department sets the standard salary level for exempt EAP employees at the 40th percentile of weekly earnings of full-time salaried workers in the lowest-wage Census Region. The Department also permits employers to satisfy up to 10 percent of the standard salary requirement with nondiscretionary bonuses, incentive payments, and commissions, provided these forms of compensation are paid at least quarterly. The Department sets the total annual compensation requirement for an exempt Highly Compensated Employee (HCE) equal to the annualized weekly earnings of the 90th percentile of full-time salaried workers nationally. The Department also adds a provision to the regulations that automatically updates the standard salary level and HCE compensation requirements every three years by maintaining the earnings percentiles set in this Final Rule to prevent these thresholds from becoming outdated. Finally, the Department has not made any changes in this Final Rule to the duties tests for the EAP exemption.

This Final Rule is effective on December 1, 2016. Director, Division of Regulations, Legislation and Interpretation, U.S. Department of Labor, Wage and Hour Division, Room S-3502, 200 Constitution Avenue NW., Washington, DC 20210; telephone: (202) 693-0406 (this is not a toll-free number). Copies of this Final Rule may be obtained in alternative formats (Large Print, Braille, Audio Tape or Disc), upon request, by calling (202) 693-0675 (this is not a toll-free number). TTY/TDD callers may dial toll-free 1-877-889-5627 to obtain information or request materials in alternative formats. Labor Minimum Wages Overtime Pay Salaries Teachers Wages Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees , http://blog.dol.gov/2015/08/26/non-profits-and-the-proposed-overtime-rule/ http://data.bls.gov/cgi-bin/cpicalc.pl http://stats.oecd.org/index.aspx?DataSetCode=ANHRS http://www.agcensus.usda.gov/Publications/2012/Full_Report/Volume_1,_Chapter_1_US/usv1.pdf http://www.bls.gov/cps/research_series_earnings_nonhourly_workers.htm http://www.bls.gov/ncs/ncswage2010.htm http://www.bls.gov/opub/mlr/cwc/the-effect-of-incentive-pay-on-rates-of-change-in-wages-and-salaries.pdf http://www.bls.gov/opub/mlr/cwc/wages-in-the-nonprofit-sector-healthcare-personal-care-and-social-service-occupations.pdf http://www.bls.gov/opub/mlr/cwc/wages-in-the-nonprofit-sector-management-professional-and-administrative-support-occupations.pdf http://www.census.gov/hhes/www/poverty/data/threshld/index.html http://www.census.gov/people/io/methodology/ http://www.dol.gov/whd/america2.htm http://www.dol.gov/whd/minwage/AmericanSamoa/ASminwagePoster.pdf http://www.dol.gov/whd/opinion/flsa.htm http://www.dol.gov/whd/opinion/flsana.htm http://www.dol.gov/whd/regs/compliance/whdfs14.pdf http://www.dol.gov/whd/regs/compliance/whdfs14a.pdf http://www.gpo.gov/fdsys/pkg/USCODE-2011-title49/html/USCODE-2011-title49-subtitleVI-partB-chap315-sec31502.htm http://www.gpo.gov/fdsys/pkg/USCODE-2013-title45/html/USCODE-2013-title45-chap8-subchapII.htm http://www.gpo.gov/fdsys/pkg/USCODE-2013-title49/pdf/USCODE-2013-title49-subtitleIV-partA.pdf http://www.opm.gov/oca/pay/HTML/AP.HTM http://www.Reginfo.gov http://www.sba.gov/advocacy/regulatory-flexibility-act http://www.uscourts.gov/statistics/table/c-2/federal-judicial-caseload-statistics/2015/03/31 http://www.uscourts.gov/statistics/table/c-2/statistical-tables-federal-judiciary/2014/12/31 http://www.whitehouse.gov/the-press-office/2014/03/13/fact-sheet-opportunity-all-rewarding-hard-work-strengthening-overtime-pr http://www2.census.gov/govs/apes/2012_summary_report.pdf http://www2.census.gov/govs/cog/g12_org.pdf http://www2.census.gov/govs/local/summary_report.pdf http://www3.norc.org/GSS+Website/About+GSS/ https://nrf.com/sites/default/files/Documents/retail%20library/Rethinking-Overtime-Appendices.pdf https://usa.ipums.org/usa/volii/indcross03.shtml https://www.census.gov/econ/susb/ https://www.census.gov/geo/reference/gtc/gtc_census_divreg.html https://www.irs.gov/pub/irs-soi/12coccr.pdf https://www.whitehouse.gov/sites/default/files/docs/ot_state_by_state_fact_sheet.pdf https://www5.fdic.gov/SDI/index.asp www.bls.gov/cps/research_series_earnings_nonhourly_workers.htm www.ncsc.org/clcm www.onetcenter.org www.regulations.gov Vol. 81, no. 99 Office of the Federal Register, National Archives and Records Administration 2016-05-23 continuing daily deposited born digital 399 p. Table of Contents: AE 2.7: GS 4.107: AE 2.106: KF70.A2 https://www.govinfo.gov/app/details/FR-2016-05-23 P0b002ee198595c6e 0097-6326 0042-1219 0364-1406 769-004-00000-9 000582072 f:fr23my16 https://www.govinfo.gov/app/details/FR-2016-05-23 https://www.govinfo.gov/content/pkg/FR-2016-05-23/pdf/FR-2016-05-23.pdf https://www.govinfo.gov/content/pkg/FR-2016-05-23/xml/FR-2016-05-23.xml fdlp 32227 32615 DGPO 2018-02-07 2024-06-01 FR-2016-05-23 machine generated eng FR FR-2016-05-23 81 99