Department of Labor Overtime Update Proposal
In March 2019, the US Department of Labor (DOL) introduced a proposal that would entitle more than 1 million salaried employees nationwide to overtime compensation. This would be accomplished by increasing the existing salary overtime threshold from $23,660 to $35,308, meaning salaried employees making less than $35,308 annually could receive overtime compensation for hours worked in excess of 40 in a week.
The 2016 Final Rule
You may recall a similar 2016 overtime proposal, when President Obama's DOL signed the overtime final rule into law. That rule was set to double the existing threshold to $47,476, entitling over 4 million salaried workers to overtime pay. After tremendous pushback and a class action lawsuit against the DOL, a US District Judge temporarily enjoined the new rule, citing a lack of authority by the DOL to make the change. In August 2017, the same judge permanently blocked the DOL’s rule, ending that update to FLSA (Federal Labor Standards Act) overtime law.
Proposed 2019 Overtime Update
The new proposal increases the threshold by 50% and is expected to pass into law without the same pushback. Business owners with salaried workers who make more than $23,660 and less than $35,308 should pay special attention to this proposed law. Over a million employees nationwide who are currently exempt from overtime compensation will be eligible if the rule becomes law. Currently, this is still only a DOL proposal. The final rule with be forthcoming.
In terms of economic impact, the DOL estimates that under the proposed rule employees will be paid approximately $429.4 million dollars per year over the first ten years.
For more information, review the official Notice of Proposed Rulemaking published by the Department of Labor.