Skip to content

Comp Time, Deductions Come Under Fire in New Overtime Pay Rule Effective Jan. 1

Three years after first taking up the issue, the U.S. Department of Labor has issued a final rule to raise the salary threshold by which employers are required to pay their employees overtime pay. Starting January 1, any employee earning $684 a week or less must receive time-and-a-half pay for hours worked in excess of 40. The previous threshold was $455 a week.

In addition to the overtime exemption, the final rule, as part of the Fair Labor Standards Act (FLSA), carries several new stipulations relative to wage and hour workplace practices.

To help our clients and partners better understand and prepare for the new rules, Sentinel hosted an employment law seminar on November 7 in Raleigh, with a feature presentation by attorney Kyle Still of Wyrick Robbins. Still is one of the Triangle area’s leading employment law specialists.

Highlights of Still’s presentation are below. To download the full presentation, click here.

January 1 Overtime Rule Stipulates:

–No more than 10 percent of employee’s pay can be comprised of non-discretionary incentive pay, such as bonuses.

–For an employee to be exempt from the rule and not be eligible for overtime, they must meet the salary threshold, receive that salary every week regardless of quantity or quality of work, and perform duties within the scope of their primary job responsibilities.

–Employers may establish limits to overtime work, including pre-authorizations, but must still pay overtime, even if unauthorized.

–Compensatory time may not be used in place of overtime pay for nonexempt employees.

–The rule does allow for fluctuating work weeks,  with a guaranteed weekly salary and the promise of “half rate” pay for hours worked over 40, under certain conditions.