Who is Affected?
With the start of a new year, employers should review their wage and hour practices. The Department of Labor (DOL) has released a Notice of Proposed Rulemaking about overtime pay in 2019. The DOL may increase the salary threshold for employees defined as “exempt” or ineligible for overtime pay.
Generally, salaried employees who are managers and employees who have a professional degree or training in certain fields are exempt from earning overtime pay.
How much is the Proposed Salary Threshold Increase?
For salaried employees to qualify for overtime exemption under the FLSA, they must be paid a minimum of at least $455 per week ($23,660 per year). In July 2015, the US Department of Labor proposed an increase of the salary threshold to $913 per week ($47,476 per year), but that proposal was blocked by a federal court ruling in November, 2016. The DOL has indicated that they will publish new rules as early as March, but those rules would probably have a delayed implementation.
How should Employers Prepare?
To prepare for the new potential changes,
- Review job descriptions, duties and compensation packages to determine if exemption classifications apply to existing employees.
- Ensure you are in compliance with the current federal law.
- Review local and state regulations because they may require higher thresholds than federal regulations.
- Watch for any news of an increase and make sure that salaried employees are paid at the new minimum threshold or that you track their hours and pay them overtime as appropriate.