Are you paying overtime in compliance with recent rulings?
If your company’s employees are working overtime to help you achieve a profitable bottom line, you’re in a…
On March 7, 2019, the Department of Labor announced a proposed rule that would update the Salary Level Test, making more than a million more American workers eligible for overtime. This would raise the salary requirement that determines whether an employee is exempt from getting paid overtime. In order for an employer to avoid paying an employer an overtime premium for hours worked over 40 in a workweek, it must show that the employee meets a duty and salary test.
After an attempt in 2016 during the Obama administration to raise the level to $47,476 per year was delayed by a federal judge for the U.S. District Court for the Eastern District of Texas (and then denied by the current administration), the current DOL is scheduled to propose a new threshold in March 2019. US Labor Department Secretary R. Alexander Acosta suggested during his confirmation hearing that the maximum for mandatory overtime pay should be increased to around $33,000.
What might the new salary threshold be if the proposed Overtime Rule gets enacted?
What to expect after enactment of the Overtime Rule?
Conclusion
The proposed rule is expected to become effective approximately in January 2020. The Department of Labor intends to propose an update to the salary threshold every four years to ensure that these levels continue to provide useful tests for exemption. Updates would not be automatic and would continue to require notice-and-comment rulemaking.