News Department of Labor publishes Overtime Final Rule, updates threshold

The Department of Labor has published a Final Rule on overtime that sets the minimum salary threshold of $35,568 to be eligible for overtime. This will make approximately 1.3 million more workers eligible to earn overtime. The rule will be effective Jan. 1, 2020.

The new rule, which was published Sept. 24, 2019, is the first update to the overtime threshold since 2004.

An update was proposed by the Obama Administration in 2015 that doubled the current standard, raising the threshold to $47,476. A stay was issued in a federal Appeals Court and was not acted on by the Trump Administration that gained the Oval Office in January 2016.

The Wage and Hour Division held numerous public hearings across the country, including one in Providence attended by the Providers’ Council, as it worked to set the new standard. The $35,568 is slightly higher than the anticipated $35,308 proposed in the initial draft of the rule (representing the halfway point between the current standard of $23,660 and the $47,476 proposed in 2015). It will also allow employers to count non-discretionary bonuses, incentives and commissions as up to 10 percent of an employee’s salary as long as they are paid annually.

The final rule released on Sept. 24 will not make any changes to the Fair Labor Standards Act (FLSA) duties test that determines which employees are exempt from earning overtime. Additionally, it does not include an automatic adjustment component – a main reason why the 2015 Obama Administration proposal was held up in federal court.

If you have questions about the DOL Overtime Final Rule, please email Bill Yelenak at bill@providers.org.

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