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Tax Tip Tuesday: New Department of Labor Overtime Regulations

This week we are going to take a brief look at the new Department of Labor (DOL) overtime regulations that go into effect on December 1, 2016.

The DOL overtime rule determines which employees are exempt from overtime. Employers don’t have to pay overtime to exempt employees. Employers do have to pay overtime to employees who are not exempt.

To be exempt, an employee must receive a salary and have executive, administrative, or professional duties. Those two qualifications do not change with the new overtime rule.

But here is where things will change. While the worker still must be paid more than the salary threshold, that threshold is set to increase. The new salary rule raises the threshold to $913 per week, or $47,476 per year. Before the rule changed, the salary threshold was $455 per week, or $23,660 per year. The salary threshold is set by the DOL in the overtime rules.

Disclaimer: The items included in the Tax Tip Tuesday Video Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation. IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advise contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

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