Client Alert – Proposed Overtime Rule

Employment Law Update

March 2019

On March 7, 2019, the Department of Labor (DOL) announced its long-awaited Notice of Proposed Rulemaking (NPRM) pursuant to which the DOL proposes to increase the minimum salary required for an employee to qualify for an exemption from overtime. The proposed increase is projected to result in an excess of one million additional American workers becoming eligible for overtime.

Under the current law, employees with a salary below $455 per week ($23,660 annually) must be paid overtime if they work more than 40 hours per week regardless of whether they qualify for one of the overtime exemptions. This minimum salary level has not increased since 2004. The new proposed minimum salary would increase the salary threshold from $455 to $679 per week (equivalent to $35,308 per year).

In addition to raising the minimum salary threshold, the NPRM:

  • Proposes to increase the total annual compensation requirement for “highly compensated employees” from the currently-enforced level of $100,000 to $147,414 per year.
  • Does not provide for automatic future increases in the minimum salary threshold.
  • Does not make any proposed changes to the duties test used to determine whether an employee’s job duties qualify for one of the exemptions set forth in the Fair Labor Standards Act.

The DOL encourages any interested members of the public to submit comments about the proposed rule at www.regulations.gov. Once the rule is published in the Federal Register, the public will have 60 days to submit comments regarding the proposed rule. Until the ruling is finalized, nothing changes in the current law. We will keep you posted with any new developments.

If you have any questions about the NPRM or regarding your obligations pertaining to overtime compensation, please do not hesitate to contact Bryan Niemeyer, Certified Labor and Employment Law Specialist, at 937-492-1271 or bniemeyer@fgks-law.com.

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