Overtime Exemption Regulations Proposal Released By DOL

It’s déjà vu all over again! The DOL has released their new proposed updates to the overtime exemption regulations to the Fair Labor Standards Act (FLSA). I know, we were here before, and then suddenly back to the beginning. Whiplash!

DOL LogoSince the previous changes to the overtime exemption were scuttled in November 2016, employers have been waiting to see what, if anything, happens next. And now, it’s happening!

A quick overview of the changes:

  • The proposal increases the salary threshold for overtime eligibility to $35,308 a year, up from the current $23,660.
  • On a weekly scale, that is up to $679/week, from the current $455/week.
  • This salary threshold would give expand overtime eligibility to more than a million additional U.S. workers.
  • The proposal does not include automatic, periodic increases of the salary threshold as the previous one did.
  • Instead, the salary threshold would be revisited every four years through new proposed rulemaking.
  • The total annual compensation requirement for highly compensated employees would increase from the current $100,000 per year level to $147,414 per year.
  • The expected effective date is in January 2020.
  • The proposal makes no changes to standard duties test.

There you have it. And what’s next?

We’re now in a 60 day comment period, and the rule that comes out at the end of that time may look very different than what we see here today. And experts also advise keeping your plans  the 2016 overtime exemption handy, because depending on the 2020 election results, and how far along this rule is then, there’s a possibility the Obama-era rule may make a reappearance. Déjà vu on top of déjà vu! Wild!

Get yourself prepared. C4CM is offering New Overtime Rules: What Employers Need to Know Now to Navigate the Complex Changes, a webinar designed to help you prepare for and absorb the impact of any changes to the FLSA regulations.

-Tina Nacrelli

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