2016 FLSA Changes

On May 18, 2016, President Obama and Secretary of Labor Thomas E. Perez announced the publication of the Department of Labor’s final rule updating overtime regulations. The final rule focuses primarily on updating the salary and compensation levels needed for Executive, Administrative, and Professional workers to be exempt.

Specifically, the Final Rule:

- Sets the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South ($913 per week; $47,476 annually for a full-year worker);

- Sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test to the annual equivalent of the 90th percentile of full-time salaried workers nationally ($134,004); and

- Establishes a mechanism for automatically updating the salary and compensation levels every three years to maintain the levels at the above percentiles and to ensure that they continue to provide useful and effective tests for exemption.

In order for the State of Arizona to be in compliance with the federal effective date, communication and training materials are being made available below.


Communications Training & Guides

EMPLOYEE TEMPLATE LETTERS

Employee's Current Exemption Status Employee's Future Exemption Status Change in Salary Change in Duties Template Letter
Exempt Exempt Yes No Letter A
Exempt Exempt Yes Yes Letter B
Exempt Non-Exempt No No Letter C *
Exempt Non-Exempt No Yes Letter D *

*If an employee’s position will be moving to FLSA Non-Exempt status (option C or D above), please use the Overtime Compensation Election Form to make the appropriate overtime payment selection.