When the Obama administration’s overtime ruling was overturned in 2017, many employers were left to wonder when or how it might be resurrected. We all knew an overtime ruling was still coming (the current threshold hasn’t been raised since 2004) but when the threshold would be raised and by how much was left to much speculation.
Last month, the U.S. Department of Labor (DOL) issued a Notice of Proposed Rulemaking that offers some answers. The proposal raises the salary threshold for fulltime workers eligible for overtime pay from $455 per week to $679 per week (which is a salary of $35,308).
Some points from the DOL:
- The proposed overtime ruling is scheduled to go into effect in 2020 but is open for comments until May 21, 2019. You can find the document at regulations.gov in the rulemaking docket RIN 1235-AA20.
- The proposal also asks for public comment on language for periodic reviews to update the salary threshold so that it doesn’t remain static for another 15 years. Any updates to the overtime ruling would still require the notice-and-comment process.
- 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.
- There are no changes to the job duties test and no changes in overtime protections for police officers, firefighters, paramedics, nurses, non-management production-line laborers or other non-management workers in maintenance, construction, and similar occupations.
Even though the overtime ruling is only in the proposal stage and wouldn’t go into effect until at least January 1, 2020, don’t wait to figure out how it might affect your employees. Tammy McCutchen, an attorney with Littler in Washington, D.C., told attendees at the 2019 Society for Human Resource Management Employment Law & Legislative Conference that the DOL may give employers little time to bring their pay practices into compliance because it may push to have the final rule in place before the 2020 election.
“Compliance will take more time than you anticipate,” she warns, adding that employers should also review workers’ job duties and correct any exempt classification errors sooner rather than later. We’ll bring you more on the overtime ruling as the deadline draws closer.