New Overtime Rule is Nearing

The Department of Labor (DOL) continues to move forward with plans for a major increase to the salary threshold for exempt employees. If finalized, the proposed rule would extend overtime protections to more than one million workers who are not currently eligible under federal law.

Over 116,000 comments have been received by the DOL on the proposed rule. Comments ran the gamut from urging the gradual phasing in of the new threshold to criticizing the DOL for not staying with the higher threshold initially proposed by the Obama administration.

Unless a change is made by the DOL, the new minimum amount a worker must earn to qualify as exempt from overtime pay will be $679 per week or $35,308 per year.

Unless exempt, employees covered by the Fair Labor Standards Act must receive at least time and one-half their regular pay rate for all hours worked over 40 in a workweek.

Meeting the salary threshold doesn't automatically make an employee exempt from overtime pay; the employee's job duties also must primarily involve executive, administrative or professional duties as defined by the regulations.

The new overtime rule is likely to take effect in early 2020 but it could come sooner than later. Clearly it is a good idea to start getting ahead of this issue and planning for changes in 2020. However, before making any changes employers will need to wait and see what the final threshold will be.

For more information, see: www.dol.gov/whd/overtime2019


This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer, or other professional.

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