Department of Labor Overtime Rule Update

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Abstract

Under the direction of President Obama, the Secretary of Labor updated overtime regulations on May 18, 2016. The update follows the original intent of the Fair Labor Standards Act—to increase wages of middle-class workers or allow them more free time outside of their jobs. The update modernizes and simplifies the rules so that they are easier for workers and businesses to understand and implement.

New Overtime Rules

According to the Department of Labor’s website (https://www.dol.gov/featured/overtime) the final rules take effect on December 1, 2016 and will:

  • Raise the salary threshold indicating eligibility from $455/week to $913 ($47,476 per year), ensuring protections to 4.2 million workers.
  • Automatically update the salary threshold every three years, based on wage growth over time, increasing predictability.
  • Strengthen overtime protections for salaried workers already entitled to overtime.
  • Provide greater clarity for workers and employers.

Response to New Overtime Rules In response

In response to the new overtime rules, employers can perform any combination of the following actions:

  • Pay time-and-a-half for overtime work
  • Raise workers’ salaries above the new threshold ($47,476 annual salary)
  • Limit workers to 40 hours per week

How NOVAtime Can Help

NOVAtime offers a complete workforce management solution that accounts for the new overtime rules. NOVAtime 5000 is a comprehensive software solution that provides organizations with real-time management of overtime rules. The system can alert managers when their employees approach overtime or set thresholds to reduce overtime of their workforce. NOVAtime 5000 also has the ability to perform multiple complex overtime calculations, based on rules built into the system. Overtime calculations take into account the start and stop times, scheduled hours, and type of duty performed. By using the NOVAtime rules engine, organizations can configure pay categories and assign them to different rules and groups—all with unique calculations and cost centers.

For additional information, please contact NOVAtime: 877-486-6682 - or - Click here