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Wednesday, March 13, 2019

New Proposed Overtime Regulations would Make More than 1 Million More American Employees Eligible for Overtime

On March 7, 2019, the U.S. Department of Labor (“DOL”) released proposed changes to the overtime regulations under the Fair Labor Standards Act, 29 U.S.C. § 201 et. seq. (“FLSA”).  Currently, the salary threshold for certain “white collar” employees to be exempt from overtime wages is $23,660 ($455 per week).  The proposed rule would increase that salary requirement to $35,308 ($679 per week).  The DOL also proposes that the “highly-compensated employee” exemption to overtime should be restricted to earners of at least $147,414 (currently $100,000). 

As you may recall, the DOL attempted to raise these salary thresholds in 2016, but that change was enjoined by the United States District Court for the Eastern District of Texas.  This current proposed change attempts to avoid injunction by: (1) increasing the thresholds by smaller amounts and, (2) not including automatic adjustments to the thresholds; rather, any further updates will also have to go through this notice and comment period.  This proposed change to the salary test could affect approximately one million American employees’ eligibility for overtime compensation and many employers’ salary structures.

If you desire to comment on how the proposed regulation might affect any or all aspects of your business, you can do so until approximately May 10, 2019.  To be most effective, you may want to consider commenting with an employment group or association, a Chamber of Commerce, or other appropriate group.  Please click here  to review the regulatory proposal and here  to comment if you desire (search for: “RIN 1235-AA20” in the search box).  The final regulation may differ from the proposed regulation.

The foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such.  Please contact one of our labor and employment lawyers if you have any questions.  

This update was prepared by Charles S. Elbert and Erin M. Leach.


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