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New overtime rules come with hefty price tag

May 20, 2016
by Nicole Stempak, Senior Editor
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Salary workers who earn less than $48,000 may be eligible for overtime pay, according to the Department of Labor’s new ruling.

That could have a big impact for workers in long-term care facilities where staffing levels are set and monitored by the government, which must also balance cost of services provided with cost of Medicare and Medicaid reimbursement—and often absorb the difference.

The Department of Labor has increased the salary threshold for which certain supervisory and professional workers are exempt from overtime requirements in its final Overtime Exemption Rule, an update to the Fair Labor Standards Act.

The rule will set the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region. That is currently in the south with a wage of $913 per week, or $7,476 annually.

The rule will also set the total annual compensation requirement for highly compensated employees subject to a minimal duties test to the annual equivalent of the 90th percentile of full-time salaried workers nationally at $134,004.

In addition, the rule establishes a mechanism for automatically updating the salary and compensation levels every three years to adjust for inflation.