On May 18, 2016, the United States Department of Labor (U.S. DOL) announced the publication of its highly anticipated Final Rule updating the overtime exemption regulations pertaining to the Fair Labor Standards Act (FLSA). Although the Final Rule increases the minimum salary required to exempt executive, administrative, and professional employees from the FLSA’s minimum wage and overtime pay protections and the minimum compensation level required to exempt highly compensated employees, there were no major surprises.

The most significant change is the near doubling of the minimum salary required for the exemption of executive, administrative, and professional employees, which has been increased from $455 to $913 per week (or $23,660 to $47,476 annually); this is $57 lower than the increase noted in the U.S. DOL’s Proposed Rule (July 6, 2015). The magnitude of this change has put a national spotlight on wage and hour issues, and employers would be well served to consider conducting an internal audit of their compensation practices and any related documentation or policies (for example, offer letters, employee handbooks, etc.) to ensure that they are prepared for the Final Rule’s December 1, 2016 effective date.