Following the invalidation of its 2016 rules by a Texas district court, the U. S. Department of Labor released a new proposed rule again looking to raise the salary level required to be eligible for the “white collar” or “EAP” (Executive, Administrative, Professional) exemptions from overtime premium pay under federal law. This highly-anticipated action by the DOL looks to reset “outdated” overtime compensation thresholds from 2004 to provide higher wages to working Americans. Although the proposed salary threshold is lower than the aggressive numbers the DOL unsuccessfully set in 2016, if the proposed rule holds, a lot more employees (read: more than 1 million) will become overtime eligible.
At present, employees earning less than $455 weekly ($23,660 annually) must be paid an overtime premium if they work more than 40 hours in a workweek. The DOL’s proposed rule would boost the salary threshold to $679 per week ($35,308 annually). In addition to satisfying the “salary test”, employers also must demonstrate an employee’s work meets the “duties test” for the exemption to attach. The proposed rule also would increase the annual salary threshold for “highly compensated employees” (for which a less stringent duties test applies) from $100,000 to $147,414.
The proposed rule is subject to 60 days of public comment.
Have any questions about this latest move by the DOL? If so, the employment attorneys at M&R have the answers.
This blog post is not offered as, and should not be relied on as, legal advice. You should consult an attorney for advice in specific situations.
