Recently, we reported that the Department of Labor (“DOL”) would likely release a new rule addressing the “white collar” overtime exemptions for executive, administrative, and professional workers soon. The DOL released this much anticipated proposed rule on March 7, 2019.
Under the proposed rule, the salary level threshold would increase from $455 per week (or $23,660 annually) to $679 per week (or $35,508 annually.) The DOL’s proposed increase falls almost squarely at the midway point between the proposed Obama-era increase ($913 per week) and the current salary threshold ($455 per week.) The DOL estimates that more than one million more American workers would be eligible for overtime as a result of this increase.
Other proposed changes would include:
- Increasing the salary threshold for so-called “highly compensated employees” from $100,000 to $147,414,
- A commitment to periodically review the salary threshold, which would require the DOL to use the notice-and-commenting rule making process, and
- Allowing employers to use non-discretionary bonuses and incentive payments (including commissions) that are paid annually or more frequently to satisfy up to 10 percent of the standard salary level.
The proposed rule does not include:
- Changes to the overtime protections for police officers, fire fighters, paramedics, nurses, laborers, and non-management employees,
- Changes to the job duties test, and
- Inclusion of automatic adjustments to the salary threshold.
At this point, this rule is just a proposal and will be open for public comment for 60 days after it is published to the federal register. The DOL will then finalize the rule after a careful review of the comments. Based on previous responses to changes to the overtime rule, it is expected that groups that are not satisfied with the final rule will take legal action to prevent its implementation.