On March 7, 2019 the US Department of Labor announced a proposed rule that would make more than a million more U.S. workers eligible for overtime under the federal Wage and Hour regulations known as the Fair Labor Standards Act (FLSA). The details of the proposed rules are summarized at the DOL website.
The biggest change in the rules is the increase of the minimum salary requirement for an employee to qualify for exemption from the current level of from $23,660 to $35,308 per year.
Businesses have dodged a bullet. The changes proposed are far less drastic than the original proposal back in 2016 under the Obama administration.
The US Bureau of Labor Statistics (BLS) May 2018 National Occupational Employment and Wage Estimates reports average annual pay of $38,990 for Office and Administrative Support Occupations. Data Entry and Information Processing Workers make an average of $35,470/yr. In fact, the vast majority of the occupations listed have average pay exceeding the proposed threshold of $35,308/yr. Based on that, there should be minimal impact from this regulatory change.
It is now over two months since the period for public comment on the proposed regulations ended on June 12, 2019. The DOL is considering the comments submitted for possible revision to the proposed rules, with proposed implementation January 2020.
Stay tuned for the final curtain on this play.
The final rule is going into effect as of 1/1/2020. The new threshold for an employee to qualify for exemption from the overtime pay requirements is set at $684 a week ($35,568 annualized), a small change from the proposed threshold of $35,308/yr.
In addition to raising the threshold for exempt status, the new rule raises the threshold for highly compensated employees from the current $100,000/year to $107,432.
As proposed, there are no changes to the duties tests and no automatic adjustments to the salary threshold.
The new rule can be found at https://www.dol.gov/whd/overtime2019/index.htm. See https://www.dol.gov/whd/overtime/fs17a_overview.pdf for descriptions of the duties tests.