On Thursday, March 7, the U.S. Department of Labor released its new overtime proposal updating the salary thresholds for workers entitled to overtime compensation. According to the proposal, the new salary level will increase to $679 per week (about $35,308 annually). This is a significant increase from the current salary level of $455 (about $23,660 annually).
As you may recall, the DOL's Obama-era rule (proposing a new salary threshold of $47,476 annually) was struck down by a Texas federal district court weeks before implementation on December 1, 2016 and then stayed by a federal appeals court on November 6, 2017. Since then, employers have been limbo...until now.
The DOL's proposal will be the first increase to the salary level threshold for workers entitled to overtime compensation since 2004 if it becomes final. According to the DOL's press release, the proposal would "make more than a million more American workers eligible for overtime."
According to the Notice of Proposed Rulemaking, the nuts-and-bolts of the proposed rule are:
- The proposal increases the minimum salary required for an employee to qualify for exemption from the currently-enforced level of $455 to $679 per week (equivalent to $35,308 per year).
- The proposal increases the total annual compensation requirement for "highly compensated employees" (HCE) from the currently-enforced level of $100,000 to $147,414 per year.
- A commitment to periodic review to update the salary threshold. An update would continue to require notice-and-comment rulemaking.
- Allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid annually or more frequently to satisfy up to 10 percent of the standard salary level.
- No changes overtime protections for: Police Officers, Fire Fighters, Paramedics, Nurses, Laborers including: non-management production-line employees, Non-management employees in maintenance, construction and similar occupations such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, and construction workers.
- No changes to the job duties test.
- No automatic adjustments to the salary threshold.
The new proposal should be published in the Federal Register next week. The public will then have 60 days to comment on the proposed regulation once published in the Federal Register.► Back to News & Resources