Scopelitis Labor & Employment News - December 2018
Dec 6, 2018
The Overtime Salary Threshold - Still On Hold
The Fair Labor Standards Act requires employers to pay overtime pay for all hours worked over 40 hours in a workweek. However, employees who perform certain executive, administrative or professional duties and who earn at least $23,660 per year are exempt from overtime pay.
This salary threshold of $23,660 has been under review by the Department of Labor (“DOL”) since 2016 when the Obama administration proposed a substantial change to the salary requirement. Under the 2016 proposal, the DOL recommended that the salary threshold be increased to $47,476. Under the 2016 proposal, an employee earning less than $47,476 would be entitled to overtime pay, regardless of the employee’s job duties. This proposal was, however, eventually blocked by a federal court before it could be implemented leaving many to wonder whether to expect any further changes to the exemption requirements.
Last year, the DOL issued a Request for Information as a precursor for its rulemaking process to determine the appropriate new salary threshold for the overtime exemption, which was to be published this Fall. Speculation is that the new threshold will be somewhere between the current amount ($23,660) and that proposed by the DOL in 2016 ($47,476). While we expect there to be an increase in the salary threshold, we are left to wait until Spring 2019 when the DOL now expects to publish its new proposed rule.
In anticipation of the new thresholds, all employers should be reviewing their exempt employees to confirm that they are in compliance with the current regulations (salary and duties tests,) and how a new salary threshold will impact their workforce. For more information, please contact Jack Finklea, David Robinson, Don Vogel, or Sara Pettinger.
Scopelitis practice area newsletters are intended as reports to our clients and friends on developments affecting the transportation industry. The published material does not constitute an exhaustive legal study and should not be regarded or relied upon as individual legal advice or opinion.
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