Department of Labor Issues Overtime Rule
Visiting Nurse Associations of America
Tuesday, May 24, 2016
by: Visiting Nurse Associations of America

Section: Public Policy and Advocacy

On May 18, the U.S. Department of Labor (DOL) released final guidance on the "overtime" rule, which updates minimum salary requirements and overtime thresholds and will have an impact on a wide range of industries, including home health and hospice. 
Key provisions include: 
  • Increasing the salary threshold. The final rule will raise the salary level for the first time since 2004. It raises it from $455 a week to $913 a week ($47,476 for a full-year worker). This means that salaried workers will be automatically entitled to overtime, based solely on their salary. This increase will go into effect on December 1, 2016. 
  • Raising the total annual compensation level. The rule also updates the total annual compensation level above which most white collar workers will be ineligible for overtime. The final rule raises this level to the 90th percentile of full-time salaried workers nationally, or from the current $100,000 to $134,004 a year.
  • Applying bonuses and non-wage income. The final rule outlines how bonuses and other incentives impact wages. It will allow a salary threshold of up to 10 percent to be met by non-discretionary bonuses, incentive pay or commissions, provided these payments are made on at least a quarterly basis. 
Home health agencies will need to understand and record how many hours salaried and "fee basis" employees are working. Tracking the time spent working for home health workers can be challenging and it will be important to develop a method of calculating income in comparison to hours in advance of the December 1, 2016, implementation of this rule.

The DOL has released a series of fact sheets and Q&As for specific sectors, including nonprofits, and options for being in compliance. 
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