New Overtime Rule, effective December 1, 2016, likely to impact healthcare workforce

On May 18, 2016, the U.S. Department of Labor issued a new rule affecting the regulations on overtime pay: Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees.

The standard salary threshold for full-time salaried “white collar” workers will be increased from $455 per week to $913 per week (or from the current annualized $23,660 to $47,476).  This number is based on the 40^th percentile of full-time salaried workers in the lowest-wage Census region (currently the South) and will be adjusted accordingly every three years.  The highly compensated employees (HCE) salary threshold for full-time salaried workers is increased from $100,000 to $134,004 per year.  This number is based on the 90^th percentile of full-time salaried workers nationally, and will be adjusted accordingly every three years.

The effective date for the new thresholds is December 1, 2016.  These threshold levels will automatically update every three years, beginning January 1, 2020.  The Department of Labor will post the new salary levels 150 days in advance of their effective date, beginning August 1, 2019.  More information may be found on the Department of Labor's webpage.

Kaiser Health News reports: "Starting in December, anyone making up to $47,476 a year will qualify for overtime. But in the health care industry that wouldn't necessarily mean the workers are going to get paid more."

In Overtime pay rules will affect millions of healthcare workers, Modern Healthcare reports:

The new Obama administration rule is expected to affect a total of 4.2 million workers. The increase to $47,476 will start this December and will affect employees who clock in more than 40 hours a week. The policy updates rules that date back to the 1930s and require employers to pay 1.5 times a worker's regular salary for any work past 40 hours a week.

Healthcare professions that will likely be affected by the overtime threshold increase are nurses, medical and physical therapist assistants, medical and pharmacy technicians, and paramedics. Average mean salaries in these professions range from $25,710 to $47,010. That includes approximately 4.1 million workers, according to 2015 data from the U.S. Bureau of Labor Statistics.

Medicaid-funded home-care providers for individuals with disabilities or facilities with 15 beds or fewer are exempt from implementing the new rule until March 17, 2019.