What You Need To Know About the New 2019 Overtime Rules

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Changes By the Department of Labor to FLSA’s Overtime Rule Expected in 2019

This post was updated on March 8, 2019 to reflect the announcement by The U.S. Department of Labor of a Notice of Proposed Rulemaking (NPRM) on March 7, 2019. See the update.

The Fair Labor Standards Act (FLSA) overtime rule details whether employees are eligible or exempt for overtime pay. In 2016 the Obama administration more than doubled the minimum annual salary required for the FLSA’s “white collar” exemption. This rule was blocked from taking effect, but has not been declared invalid.

The addition of Alexander Acosta as the new Secretary of the Department of Labor (DOL) brought new life to the Overtime Rule. In addition to several listening sessions to gather feedback from the public, Acosta has testified to Congress that the salary level below which overtime must be paid should be in the $30k range.

See Below for Update: (March 8, 2019) In January 2019, the DOL sent a proposed overtime rule to the Office of Management and Budget (OMB) for review. The OMB is typically limited to 90 days for review, but it may be extended for 30 days. The OMB has the authority to return the rule to the DOL for reconsideration, especially if it does not appear consistent with the President’s policies and priorities. The DOL has predicted that the OMB will publish the proposed rule as early as March 2019.

 

Update: On March 7, 2019 a new proposal was submitted that would update the salary threshold from $23,660 annually ($455/week) to $35,308 annually or ($679/week). The DOL is opening up public comments on the rule over the next 60 days before publishing a finalized version of the rule. You can also expect legal challenges to the proposed rule that may slow down the proposal as we approach the 2020 election. This may give employers additional time to prepare for any required changes to exemption classifications

So, what should you do in the meantime?

  1. Review more information about this proposed rule on the Department of Labor website: https://www.dol.gov/whd/overtime2019/
  2. Employers should review job descriptions, job duties, and compensation of exempt employees to see if any exemption classifications may be subject to scrutiny under the anticipated salary levels.
  3. We also urge employers to review developments at the state level to determine whether the state has any existing or proposed state salary level or other exemption requirements which may differ from or exceed the federal salary level to qualify for an overtime exemption under state law.
  4. Review your current timekeeping methods to ensure you have an accurate way to track employees’ time, especially for those who meet current and future overtime rule regulations.

Need to Prepare Your Organization for the Updated Overtime Rules?

 

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