September/October 2016 -- The US Department of Labor has released the final version of the Overtime Exemption Rule, which will require clubs to pay overtime to any employee making less than $47,476 per year. The final rule will take effect on Dec. 1, 2016.
Under the current law, salaried employees making at least $455 per week ($23,660 per year) and who meet the requirements under the “primary duty” test are exempt from overtime compensation. Under DOL’s new rule, the minimum salary threshold will increase to $913 per week ($47,476 per year). The previous version had proposed a threshold increase to $970 per week ($50,440 per year).
An important concession for clubs, DOL’s final rule makes no changes to the primary duties test, which may have further reduced the number of employees classified as exempt.
The rule also requires the minimum salary income threshold to be increased every three years – not each year as the previous version of the rule had proposed. The threshold will adjust to meet the 40th percentile of full-time salaried workers. Based on wage projections, the threshold is expected to rise to more than $51,000 on Jan. 1, 2020.
Also important for many private clubs, employers will be able to count bonuses and commissions – including golf and tennis lesson income – toward as much as 10 percent of the salary threshold.
The rule’s most important concession is a six-month phase-in period for its implementation.
“This is an important issue that will impact all facilities and directors of tennis with their staffing budgets and payroll beginning in December,” said USPTA CEO John Embree. “We want to bring this to everyone’s attention in case you are not aware of it. For more information, contact your human resource department or a local labor board or chamber of commerce.”