On March 7, 2019, the United States Department of Labor (DOL) issued a Notice of Proposed Rulemaking that could make more American workers eligible for overtime. The DOL’s newly proposed rule would increase the standard salary threshold from $455 to $679 per week, or $23,660 to $35,308 per year. This salary threshold increase is based on current wage data projected through the end of 2019. The current standard salary level was set in 2004.
Under the proposed rule, employees with a salary below $679 per week must be paid overtime for all hours they work over 40 hours per week. Employees with a salary of at least $679 per week may be eligible for an overtime exemption based on their job duties.
The proposed rule also:
- allows the use of nondiscretionary bonuses and incentive payments, including commissions, that are paid at least annually to satisfy up to 10% of the salary level.
- does not provide for automatic adjustments to the salary threshold.
- includes a commitment by the DOL to periodically review and update the salary threshold.
- increases the total annual compensation requirement for “highly compensated employees” from $100,000 to $147,414 per year.
- does not change any of the job duties tests.
- continues to provide overtime protections for police officers, fire fighters, paramedics, nurses, and certain laborer positions.
Public comments will be able to be submitted for consideration for 60 days once the proposed rule is published in the Federal Register.
The proposed rule and its effect on employers will be addressed at CGWG’s Wage and Hour Boot Camp on April 11. To register, visit our events page. If you have questions concerning the DOL’s newly proposed rule, please feel free to contact one of our wage and hour attorneys by calling (501) 371-9999.