FLSA and Salaried Non-exempt Employees

How will the new FLSA rules on Salaried Non-exempt Employees affect me?

The Department of Labor FAQ page says “in the first year, the Department estimates that 4.6 million workers exempt under the current regulations who earn at least the current weekly salary level of $455 but less than the proposed salary level of $921 would, without some intervening action by their employers, become newly entitled to overtime protection under the FLSA.”

What is the essential change?

The rule is being held up on a preliminary injunction (this post is current as of 12/1/2016) issued by a federal judge in Texas. Potentially, many more employees will qualify as Salaried Non-exempt because the salary range for that group has been greatly expanded. If an employee DOES qualify as Salaried Non-exempt, two different rates of overtime may need to be calculated when the employee works more hours than the agreed number. CA and OH have additional calculations.

Annual Salary = (Salary per pay period) * (number of pay periods in the year)

Yearly Contracted Hours = (Contract Hours per week) * (52)

Effective Hourly Rate = Annual Salary / Yearly Contracted Hours

Overtime Premium = Effective Hourly Rate / 2

Overtime Rate = Effective Hourly Rate * 1.5