By: Kylie Luff, Senior Vice President
On March 7, 2019 the Department of Labor (DOL) announced a proposed rule that would make more than one million American workers eligible for overtime. Under the current wage and hour regulations, employees with a salary below $455 per week ($23,660 annually) must be paid overtime for all hours worked over 40. Workers making at least this salary may still be eligible for overtime based on their specific job duties.
The proposed rule would increase the salary level to $679 per week ($35,308 annually). To reach this decision, the Department held six in-person listening sessions around the nation and considered more than 200,000 comments that were received as part of a 2017 Request for Information (RFI).
Below are the key points of the proposed rule:
- Increasing the minimum salary required for exempt employees from the current level of $455 to $679 per week.
- Increasing the total annual compensation for “highly compensated employees” from $100,000 to $147,414.
- Committing to periodic reviews to update the salary threshold. An update would require notice and comment rulemaking.
- Allowing employers to use non-discretionary bonuses and incentive payments (including commissions) that are paid annually or more frequently to satisfy up to 10 percent of the salary level requirement.
Key points that have not changed:
- There are no changes to the job duties test.
- There are no automatic adjustments to the salary threshold.
The DOL has stated that it anticipates an effective date of January 2020 for the rule. It is our hope that, by highlighting these key points, we can assist your business to feel confidently prepared in dealing with this change once it’s implemented.