The US Dept. of Labor has proposed to more than double the amount of money an employee would have to earn before she or he could be exempted from overtime pay.
The rule change, to be finalized next year, would extend overtime pay and the minimum wage to almost 5 million more workers in 2016, its first full year of implementation, the DOL said Tuesday. The revision is at the core of planned changes to the Fair Labor Standards Act’s wage and overtime protections, which were last updated in 2004.
The revisions would:
The proposal would effectively set the standard salary level at the 40th percentile of weekly earnings for full-time salaried workers, the most appropriate line of demarcation between exempt and nonexempt employees, the DOL said in a statement.
“This salary level minimizes the risk that employees legally entitled to overtime will be subject to misclassification based solely on the salaries they receive, without excluding from exemption an unacceptably high number of employees who meet the duties test,” the department said.
The proposal does not include specific regulatory changes to the so-called “duties test” that determines whether salaried workers earning more than the threshold are entitled to an exemption from overtime rules. Hourly workers would generally continue to receive overtime pay, as they do under current rules.
Other questions concerning overtime pay rules and the FSLA are answered in a DOL factsheet.
In keeping with the rulemaking process, when the Department of Labor’s Notice of Proposed Rulemaking is published in the coming days, there will be opportunities to submit comments in writing. Only after reviewing and considering all the comments will the Department determine what to include in a final rule next year.
