Small Business

U.S. Department of Labor Announces Proposal to Increase Eligibility for Overtime Pay

On March 7, 2019 the U.S. Department of Labor announced a Notice of Proposed Rulemaking (NPRM) to make more than a million Americans eligible for overtime pay. Under current law, Americans making $455 per week (23,660 annually) must be paid overtime if they work over 40 hours a week. The proposal would be updating the 2004 rule and increase that salary threshold from $455 to $679 per week ($35,308 annually) bringing higher wages to Americans.

As proposed, the rule would:

  • Increase 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.
  • Commit to periodic review to update the salary threshold. An update would continue to require notice-and-comment rulemaking.
  • Allow 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.
  • Not change 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
  • Not change to the job duties test.
  • Not make automatic adjustments to the salary threshold.

The proposal is now open for public comment and will remain open for public comment for 60 days. To submit a comment, click this link, in the rule-making docket RIN 1235-AA20.

More information about the rule can be seen here.

 

 

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