It was just this spring that millions of Americans learned they were in for a big raise courtesy of the Obama administration’s long-awaited updating of the federal rules for overtime pay.
The threshold for determining whether salaried workers are eligible for automatic time-and-a-half compensation when they work more than 40 hours a week is set to double on Dec. 1 to $47,476, giving a much-needed boost to an estimated 4 million workers.
They can enjoy it while it lasts—if they even receive it at all. It’s looking increasingly likely that a rollback of the overtime rules are squarely in the sites of congressional Republicans and the incoming Trump administration.
This is possible thanks to something called the Congressional Review Act. Among its provisions? Congress can vote to repeal—and a new president can sign off on—legislation rescinding regulations approved by the previous chief executive within 60 legislative days.
On May 18, 2016, the U.S. Department of Labor announced a major change to the law governing overtime pay. Here’s what you need to know.
What is the new overtime pay law? The new overtime pay law significantly increases the number of people who qualify for time-and-a-half pay for any hours they work beyond 40 in a week. Under the new law, salaried employees making less than $47,476 a year must be paid overtime. (Almost all hourly employees, regardless of their wage, are already entitled to overtime pay.) This new protection applies to almost anyone making less than $47,476, including salaried managers or professionals.
When does the new overtime pay law go into effect? The new overtime pay law will go into effect on December 1, 2016.
Does the new overtime pay law apply to me? The new overtime law makes it easier to figure out whether you’re eligible for overtime pay. Under the new law, almost anyone making less than $47,476 per year is eligible—regardless of title, job description, or managerial status.
The main exceptions are those who aren’t covered by the Fair Labor Standards Act (FLSA), the federal law that sets overtime rules and other labor standards like the minimum wage.
- If your company makes at least $500,000 in annual sales, or your organization has customers in multiple states, you are probably covered by the new overtime law (assuming you make less than $47,476 per year).
- If you work at a business that does not meet either of these criteria—for example, most nonprofits doing charitable work—or you work in one of a few excluded occupations, then you may not be covered by the new law, regardless of how much you make. The Department of Labor has details on who is covered by the FLSA.
- If you make $47,476 or above, you may still qualify for overtime if you are paid by the hour or if your job duties are not those of a bona fide professional, executive, or administrator, as defined by the Department of Labor.