On Thursday, March 7, 2019, the Department of Labor (DOL) finally issued its proposed replacement of the Obama administration’s controversial overtime rule. Under the current administration’s proposal, the minimum salary threshold required for workers to qualify for the Fair Labor Standards Act’s ‘white-collar’ exemption is $35,308 per year. The new weekly minimum salary will work out to be $679.
Employees who are categorized with white-collar exemptions, and normally would not receive overtime pay, will become eligible for overtime pay if they earn less than the new threshold amount. The proposed rule, a part of the federal Fair Labor Standards Act, is scheduled to take effect on Jan. 1, 2020. It does include an exemption for religious employers.
The DOL proposal also updates the salary threshold levels every four years through a notice-and-comment rulemaking process. The last actual threshold update occurred in 2004. The plan proposed by the Trump administration is far less aggressive than the $47,467 annual threshold (or $913 per week) proposed by the DOL under Obama.
Business owners should be aware of the DOL regulations for paying overtime. Contact me today with any questions related to your company.