Labor Department Issues New Overtime Rules

Labor Department Issues New Overtime Rules

Recently, President Barack Obama and Department of Labor (DOL) Secretary Thomas Perez announced a final rule that will automatically extend overtime pay eligibility to certain workers. The rule will entitle most salaried, white-collar workers earning less than $913 a week ($47,476 a year) to overtime pay.

The new rule does, however, maintain the Fair Labor Standards Act’s (FLSA) exemption from both minimum wage and overtime requirements for employees employed as bona fide executive, administrative, professional, and outside sales employees, which are sometimes referred to collectively as the “white collar” exemptions. To qualify for one of these “white collar” exemptions, employees generally must meet certain tests regarding their job duties and be paid a certain minimum salary. In order for an exemption to apply, an employee’s specific job duties and earnings must meet all of the applicable requirements.

Landscape architecture professionals who meet the new salary requirements of $913 a week, or $47,476 annually, will likely be exempt from overtime pay under the “learned professionals” exemption. To qualify as a “learned professional” under the standard test, all of the following requirements must be satisfied:
  • The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work that is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment.

  • The advanced knowledge must be in a field of science or learning including law; medicine; theology; accounting; actuarial computation; engineering; architecture; teaching; various types of physical, chemical, and biological sciences; pharmacy; and other occupations that have a recognized professional status and are distinguishable from the mechanical arts or skilled trades where the knowledge could be of a fairly advanced type but is not in a field of science or learning.

  • The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction, which means specialized academic training is a standard prerequisite for entry into the profession.
It is important to note that meeting this “learned professionals” criteria alone does NOT satisfy all the criteria and tests to meet the “white collar” exemptions. Employers are encouraged to carefully examine all the applicable tests along with your employees’ specific job descriptions, duties, and compensation packages to determine if ALL the criteria for the “white collar” exemption are met. Therefore, it may be prudent to consult with a human resources professional and/or legal counsel to ensure compliance with the rule. 

The new rule also addresses bonuses, incentive payments, and commissions in order to recognize the importance these forms of pay have in many companies’ compensation arrangements, particularly for managerial employees affected by the final rule.

The Department of Labor has published a Small Entity Compliance Guide to the Fair Labor Standards Act’s White Collar Exemption to assist small businesses, like small landscape architecture firms, understand and comply with the new rule. There is also a DOL website devoted to resources and other guidance on the new overtime rule. 
The overtime pay final rule goes into effect December 1, 2016. Future automatic updates to the salary thresholds will occur every three years, beginning on January 1, 2020. 


Kevin Fry
Director, PR and

JR Taylor
PR Coordinator