On May 18, 2016, the U.S. Department of Labor released its highly anticipated and contentious revisions to the Fair Labor Standards Act overtime regulations. The new regulations, which go into effect Dec. 1, make significant changes to the salary threshold for classifying an employee as exempt from the overtime requirement pursuant to the administrative, executive and professional exemptions. The changes will likely impact the exemption status of 4.2 million employees nationwide, including approximately 46,000 employees in Connecticut, resulting in U.S. employers paying an estimated additional $1.2 billion in wages in just the first year of implementation.
In order for an employee to be classified as exempt from the overtime requirement as an administrative, executive or professional employee, the so-called white-collar exemptions, three factors must be satisfied: (1) the employee must be paid a predetermined fixed salary (the salary basis test), (2) the amount of the salary must meet a minimum specified amount (the salary level test), and (3) the employee must perform specific duties (the duties test). The new regulations make changes to the salary-level test only.
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