Make Less Than $35,568? Starting January 1, You Get Overtime

The Department of Labor has just raised the minimum amount employees must make to be considered exempt for overtime, from $23,660 to $35,568, starting January 1. You still have to also meet one of the exemptions, such as administrative, professional, executive, computer professional, or outside sales, and still have to be paid on a salary basis rather than hourly.

This new rule will add about 1.3 million workers to the employees entitled to be paid overtime if they work more than 40 hours/week. So yay!

Here's DOL's summary of the rule's effects:

• raising the “standard salary level” from the currently enforced level of $455 per week to $684 per week (equivalent to $35,568 per year for a full-year worker);
• raising the total annual compensation requirement for “highly compensated employees” from the currently enforced level of $100,000 per year to $107,432 per year;
• allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10% of the standard salary level, in recognition of evolving pay practices; and
• revising the special salary levels for workers in U.S. territories and the motion picture industry.

While this is good news, I'd note that President Obama was going to raise the amount to $47,000, but this administration stopped that from happening. So if you make between $35,568 and $47,000, you should reflect your displeasure when you vote next year.

This new rule won't be automatically increased for inflation, so it may be decades before we seen another increase. Enjoy it while you can.