DOL Announces Long Awaited Overtime Rule

Remember the proposed increase in the salary threshold for overtime eligibility that had been announced during the Obama Administration and then enjoined by a federal court in 2016? Since then, the Department of Labor has promised to issue a new rule with a new threshold that is lower than the one proposed by the Obama Administration, but higher than the existing threshold that was set in 2004.

The wait is over! Yesterday, the DOL announced a Notice of Proposed Rulemaking (NPRM) that it claims would make more than a million more American workers eligible for overtime. Under currently enforced law, employees with a salary below $455 per week ($23,660 annually) must be paid overtime if they work more than 40 hours per week. Workers making at least this salary level may be eligible for overtime based on their job duties. This new proposal would update the salary threshold using current wage data, projected to January 1, 2020. The result would boost the standard salary level from $455 to $679 per week (equivalent to $35,308 per year).

The NPRM also includes the following provisions:

• 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.
  
• A commitment to periodic review to update the salary threshold. An update would continue to require notice-and-comment rulemaking.
  
• Allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid annually or more frequently to satisfy up to 10 percent of the standard salary level.
  
• No changes overtime protections for:
  
  • Police Officers
    
  • Fire Fighters
    
  • Paramedics
    
  • Nurses
    
  • Laborers including: non-management production-line employees
    
  • Non-management employees in maintenance, construction and similar occupations such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, and construction workers
    
• No changes to the job duties test.
  
• No automatic adjustments to the salary threshold.
  

This is not a final rule. The proposed rule will be published in the Federal Register and the public will be able to submit comments during a 60 day period. For more information, please visit https://www.dol.gov/whd/overtime2019/.