New Overtime and Salary Regulations Proposed
Obama Administration Overtime Proposal
In 2016, the Fair Labor Standards Act (“FLSA”) and overtime regulations got more attention than it has probably seen in over a decade. This was in large part due to the announcement that the Department of Labor (“DOL”) would be more than doubling the minimum salary required, from $23,660 to $47,476, to be exempt from paying overtime. Numerous employers believed that the change would be implemented, and went as far as increasing the salaries of individuals that would be affected by the change. Unfortunately for millions of employees, these changes never happened.
2019 DOL Proposal
After a long hiatus, the DOL has decided to unveil a new proposal that would change the minimum salary threshold to $35,308. While this is a step in the right direction, it is a small one. The new proposal is estimated to affect around 1 million people, while the 2016 proposal would have affected more than 4 million people. Perhaps one benefit of making a smaller increase to the threshold is less opposition from employer backed lobbying groups.
Some of the other key aspects of the proposal include:
- DOL proposing updates to salary levels every 4 years to prevent them from becoming outdated (prior to the 2016 and this proposal, the salary levels had not been changed since 2004);
- Allowing up to 10% of non-discretionary bonuses or incentive payments to count towards standard salary level; and
- Increase in salary threshold for Highly Compensated Employee Exemption.
Proposal Open for Comments
In light of this, employees are likely to ask “what’s next?” It’s important to note that at this point, the changes are only a proposal. Because they are just a proposal, they are open to comments.
Your comments could potentially impact the changes, so if you have the time I encourage you to participate. The details on how to submit a comment are as follows:
Electronic Comments: Submit comments through the Federal eRulemaking Portal http://www.regulations.gov. Follow the instructions for submitting comments. RIN 1235-AA20 is the relevant rule to search for once it has been placed on the Federal Register.
Mail: Address written submissions to Melissa Smith, Director of the Division of Regulations, Legislation, and Interpretation, Wage and Hour Division, U.S. Department of Labor, Room S-3502, 200 Constitution Avenue, N.W., Washington, D.C. 20210.
Further information on how to make public comment to the proposal can be found here, on pages 2-4.
Although the proposal doesn’t increase the threshold as much as I would hope, it does move more employees towards the level of compensation they deserve. In the meantime, the 2004 overtime threshold is the standard. If you or someone you know believes that they are entitled to overtime or wages from an employer, contact me and schedule a free initial consultation so we can figure out how I can help you!