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Overtime Rules Change Dec. 1—Is Your District Ready?

Kacie Kefgen

By Kacie Kefgen, MASB Assistant Director of Labor Relations and Legal Services

DashBoard, Sept. 7, 2016

The U.S. Department of Labor’s updated overtime rules go into effect on Dec. 1, 2016. These rule changes are expected to expand the number of people who qualify for overtime, including those working for school districts.

Overtime Basics

Employees who work more than 40 hours in a week qualify for time-and-half compensation, unless they are exempt.

  • Teachers are exempt from overtime rules, meaning that they do not qualify for overtime pay even though they may work more than 40 hours in a week.

  • Other “white collar” and highly compensated employee positions are exempt too, but it is the responsibility of the employer to ensure that the employee’s duties and salary actually meet the requirements for the exemption.

  • Just because someone is a salaried worker does not mean that they do not qualify for overtime pay if they work more than 40 hours in a week.

Minimum Salary Changes on Dec. 1

To qualify as exempt, an employee’s duties and salary levels must meet certain requirements. The salary levels are changing on Dec. 1:

  • The salary level for the white collar exemption is going from $455/week ($23,660/year) to $913/week ($47,476)

    • For example, perhaps the district athletic director’s responsibilities would meet the duty requirements for the exemption, but their pay is under $47,476 per year. In that case, they would qualify for overtime as of Dec. 1 if they have weeks during which they work more than 40 hours.

  • The salary level for the highly compensated employee exemption is going from $100,000 per year to $134,000 per year.

Next Steps

  • Districts should identify nonteacher employees whose current salaries fall between $23,660 and $47,476.

    • Districts should closely examine the duties of those whose salaries fall in this range and determine whether the employee duties meet the requirements for a white collar exemption.

    • If an employee does not fit into an exemption either because their duties do not meet the requirements or their salary is below the threshold, the district must pay that person overtime in weeks that they work more than 40 hours.

  • District may have employees in the highly compensated employee category, but it is unlikely, so that threshold change should not impact most districts.

If you have questions about the changes to these rules, please contact your district’s retained legal counsel or give your MASB Legal Team a call at 517.327.5914.

If you would like to hear more about these rule changes in person, join us for the Michigan Council of School Attorneys Fall Conference on Nov. 10, 2016.

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