Mutual Matters

Healthcare and the New Overtime Rule

Posted by Carrie Lowe, J.D. on Jul 14, 2016 1:00:00 PM

Provided by Hall, Arbery, Gilligan, Roberts & Shanlever, LLP

On May 18, the U.S. Department of Labor Wage and Hour Division announced its Final Rule updating the salary requirements for exemptions from overtime pay requirements under the Fair Labor Standards Act (FLSA).

Stethoscope_calendar.jpgKey Provisions of the new overtime law:

  • The Final Rule more than doubles the salary threshold needed to satisfy the most common exemptions, raising it from $23,660 to $47,476 annually ($455 to $913 weekly)
  • Increases the total annual compensation threshold for the "highly-compensated employee" exemption from $100,000 to $134,004.  (Note that employees still must perform job duties that meet the substantive requirements of these exemptions.) 
  •  There will be additional, automatic increases in the compensation levels every three years, with the next increase occurring on January 1, 2020. 
  • The Final Rule also amends the salary basis test to allow employers to use non-discretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level. 

The Final Rule goes into effect December 1, 2016.

In regards to healthcare and the new overtime rule, the question that is probably on everyone's mind now is: What does this mean for my practice or hospital?


 Find out now


Read the full text of the final rule here.

Topics: Hospital Management, Practice Management, Legal and Regulatory