FLSA Overtime Proposal sent to the White House by the Department of Labor
By Shannon Corgan, Director of Marketing
You may be wondering what’s happening with the federal overtime rules. In 2017, the Department of Labor was ready to drastically increase the salary threshold, but everything was brought to a screeching halt in 2017 by a Texas Federal judge concerned that the salary threshold was too high and would include management workers exempt from overtime pay. After the ruling was struck down by the federal judge, the Department of Labor (DOL) in 2017 put out a Request for Information (RFI) to gather comments from workers and businesses regarding needed changes to the overtime rules in the Fair Labor Standards Act (FLSA). In 2018, the Department of Labor also continued to gather additional feedback with in-person listening sessions to work on revisions to the overtime salary threshold. According to the FLSA, employers are required to pay employees overtime if they work more than 40 hours in a week.
In late July, the new acting Labor Secretary Patrick Pizzella stated the Labor Department staff should “focus like a laser beam on completing items on the Department’s Regulatory Agenda,” Pizzella told employees in a July 22 email obtained by Bloomberg Law. One of their top agenda items is to clarify the overtime pay qualification. As a result on August 12th, the DOL sent over their proposed recommendations to the White House Office of Management and Budget to change the current salary threshold for overtime in the FLSA. These recommendations were based on the over 200,000 comments from the DOL’s Request for Information in 2017 and additional feedback from their 2018 in-person listening sessions. The proposed changes to the overtime rule in the FLSA sent to the White House were solely related to the salary test and did not include any recommendations to the job duties test. According to the DOL, 1.1 million employees that are currently exempt from receiving overtime pay and earn at least $455 per week, but less than the newly proposed salary threshold of $679 per week would become eligible for overtime.
The proposal increases the minimum salary required for an employee to qualify for exemption from the currently-enforced level of $455 per week to $679 per week (equivalent to $35,308 per year). The proposed changes would increase the salary threshold for the FLSA to $35,308, up from the current salary threshold of $23,660. Under currently enforced law for the FLSA, 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 proposal doesn’t include any changes in overtime protection for police officers, paramedics, fire fighters, 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 other construction workers.
According to the FLSA, the employees that are generally exempted from overtime pay must fit three criteria. First, they have to be salaried employees paid a predetermined and fixed salary not subject to reduction because of variations in the quality or quantity of work performed. Secondly, they have to be paid at least a specified weekly salary threshold of $679 per week under this new proposal. Thirdly, they must perform executive, administrative, or professional duties as defined by the Department of Labor. Based on the swift action by acting Labor Secretary Patrick Pizzella in his first month, it’s looking promising that the new overtime rule for salary thresholds could be effective sometime in 2020.
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