Member Alerts

U.S. Department of Labor to Update Rule on Overtime Compensation


U.S. Department of Labor to Update Rule on Overtime Compensation

On Monday, May 23 the U.S. Department of Labor (DOL) is scheduled to publish its final rule modifying the qualifying criterion for exemptions from federal overtime compensation requirements. In short, the rule will vastly expand the pool of employees, employers must compensate at a rate of “time and a half” or overtime compensation, for working over 40 hours per week. The rule is scheduled to go into effect December 31, 2016.  This change to the overtime compensation requirements will be drastic for all businesses, but particularly small businesses and nonprofits across the country.

The American Bus Association (ABA), as a member of the Partnership to Protect Workplace Opportunity coalition (Partnership), is fighting against this rule. The Partnership is comprised of numerous business associations from all sectors, working in concert to stop the DOL rule from going into force. 


Congress is well aware of DOL’s new rule and the numerous efforts by the business and nonprofit communities to dissuade DOL from taking this action. In anticipation of the final rule, bipartisan bills have been introduced in both the House and Senate that would stop the DOL rule, and ensure DOL takes a more thoughtful approach to considering any changes to the overtime compensation regulations.

We need your help to tell Congress it’s time to act on these bills. Simply click on this link:, and input your contact details to send a letter directly to your legislative representatives urging them to take action in support of legislation to stop the DOL rule. 




In response to a Presidential directive, DOL issued a Notice of Proposed Rule Making (NPRM) last July proposing to increase the salary threshold that triggers the overtime compensation exemption for executive, administrative and professional employees. Under current rules, employees holding these types of positions are exempted from overtime if their salary is at least $455/week or $23,660/year or higher. Under DOL’s July 2015 proposal, the salary threshold was to increase to $970/week or $50,440/year; and, rather than going through the rulemaking process to increase the threshold in the future, it would be automatically adjusted annually going forward. While the threshold has not been changed since 2004, a more than 100% increase is simply unmanageable.

For the final rule, DOL made some modifications to its initial proposal, setting the salary threshold at $913/week or $47,476/year, and automatically updating this number on a 3-year basis through indexing. What this means is that employers with executive, administrative, or professional employees making a salary under $47,476/year, you will need to pay overtime rates to these employees if they work any amount over 40 hours per week.  

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