On March 7, 2019, the Department of Labor announced a proposed rule that would raise the income threshold for overtime pay.[1] The Department maintains that under its proposal a million more Americans would be eligible for overtime pay.[2]

Under current 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.[3] Workers making at least this salary level may be eligible for overtime based on their job duties.

The proposal would boost the proposed standard salary level to $679 per week (equivalent to $35,308 per year). Above this salary level, eligibility for overtime varies based on job duties.

The proposed rule:

  • Increases the minimum salary required for an employee to qualify for exemption from the currently-enforced level of $455 to $679 per week (equivalent to $35,308 per year).
  • Increases the total annual compensation requirement for “highly compensated employees” (HCE) from the currently-enforced level of $100,000 to $147,414 per year.
  • Contains a commitment to periodic review to update the salary threshold. An update would continue to require notice-and-comment rulemaking.
  • Allows 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.
  • The rule does not propose changes in 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, plumbers, craftsmen, operating engineers, longshoremen, and other construction workers
  • No changes in the proposal to the job duties test.
  • The proposal does not contain automatic adjustments to the salary threshold.[4]

On March 22, the Department of Labor opened the public comment period, which will remain open for 60 days, and close on May 21, 2019.[5]

[1] https://www.dol.gov/whd/overtime2019/

[2] Id.

[3] This salary level was set in 2004. See http://www.in2013dollars.com/us/inflation/2004?amount=100 According to the Bureau of Labor Statistics prices are about 34% higher in 2019 than in 2004.

[4] https://www.dol.gov/whd/overtime2019/

[5] https://www.dol.gov/newsroom/releases/whd/whd20190322