DOL publishes new overtime rule for “white collar” exemption: More than one million more workers may become eligible for overtime

On March 22, 2019, the U.S. Department of Labor (DOL) published its proposed rule to revise the overtime exemption for executive, administrative, professional, outside sales and computer employees under the Fair Labor Standards Act (FLSA). Under currently enforced law, “white collar” employees with an annual salary below $23,660 ($455 per week) must be paid overtime if they work more than 40 hours per week.

Under the proposed rule, the salary threshold will increase to $35,308 per year ($679 per week). The proposed rules also seek to redefine “highly compensated employees” as employees making $147,414 per year, an increase from the current $100,000 per year. 

Other key provisions of the rule include:

• A commitment by the DOL to periodically review and update the salary threshold.
• Employers may use non-discretionary bonuses and incentive payments (including commissions) to satisfy up to ten percent of the standard salary level.
• No changes to the duties test.

The 60-day period to comment on the proposed rule closes on May 21, 2019. All affected employers concerned or dissatisfied with the proposed rule should consider submitting comments to the DOL, which can be done electronically here. Additionally, employers with salaried employees in these groups should be prepared to adjust their pay practices.