An Overtime and Salary Threshold FAQ for Employers

Posted by Kenneth N. Winkler on

The Department of Labor’s (DOL) new overtime rule will likely increase the salary requirement for the white-collar exemptions to overtime pay under the Fair Labor Standards Act.  The current threshold is $23,660.

The new rule is also expected to explain how to calculate the salary level going forward.

Q: When will the New DOL Overtime Rule Be Published?

A: The Department of Labor is expected to publish its proposed new overtime rule in March. 

Q: What Happened to the Obama Proposed Overtime Rule?

A: In 2016, the Obama administration proposed a new salary threshold of $47,476 that would have taken effect on December 1, 2016.   The rule was expected to provide overtime eligibility to 4.2 million workers that were not previously eligible.

There were many critics of the rule who claimed that the increase was too high and burdensome on employers and would result in job reductions.  More than 55 business groups challenged the proposed rule.  The rule was eventually placed on ice in November 2016 by a Texas federal judge who ruled that it was invalid.

Although the case is on appeal, it was stayed while the DOL has been working on the new rule.

Q: What Will the New Salary Threshold Be?

A: There is a general belief that the new salary threshold will be in the mid-$30,000 range and go into effect in 2020.  This is based on comments made last year by U.S. Labor Secretary R. Alexander Acosta during his confirmation hearing.

Q: What Should Employers Do?

A: It is uncertain what the new salary threshold will be and when the rule will be effective.  Nonetheless, employers should begin analyzing how a salary increase of at least $33,000 would impact current operations.  Click here for tips to prepare your business for FLSA overtime changes.

As always, let us know if we can help or if you have any questions about the new rule.