The U.S. Department of Labor has issued its rule on overtime exemption and, not surprisingly, it’s more business-friendly than the Obama administration proposal in 2016. The Obama rule – halted by a federal district court judge before it took effect – would have made 4.1 million salaried workers newly eligible for overtime. The Labor Department predicts the newly proposed rule would make 1.3 million more workers eligible for overtime.
The newly proposed rule would raise the salary level threshold – the amount above which employees generally aren’t paid overtime – to $679 per week, or $35,308 per year. For workers who make more than that, overtime eligibility will depend on whether they primarily perform executive, administrative or professional duties.
There’s a separate salary level threshold for highly compensated employees, $147,414 annually. Bonuses and commissions can satisfy up to 10 percent of the standard salary level test for them. Highly compensated employees must also make at least $679 per week exclusive of bonuses or commissions.
The Trump administration proposal does not have the automatic adjustments to the salary thresholds every three years that the Obama proposal had.
The proposed rule is open for public comment. The Labor Department said it expects the final rule to take effect January 1, 2020.
Thanks to Richard Morris at Councilor Buchanan Mitchell for this information.Download Bulletin PDF